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Asia Pacific Financial News from John Lothian News – November 22, 2017

Lead Stories

Asian American Executives Are Missing on Wall Street; The group makes up less than 15 percent of upper management at four of the biggest U.S. banks
Laura Colby – Bloomberg
Asian Americans get hired at a much higher rate than their proportion of the general U.S. population but that doesn’t mean they’re climbing the executive ranks at the same pace. Across corporate America, Asians make up 12 percent of professionals and 5 percent of executives, according to Equal Opportunity Commission data. In finance, four of the biggest U.S. banks have less than 15 percent of their Asian workforce in C-suites or upper management.

Donald Trump’s unwitting surrender to China; The big US tech companies remain world leaders but their rivals are catching up fast
Edward Luce – FT
Sixty years ago Russia shocked the world with the launch of the Sputnik satellite. Donald Trump was 11 years old. That display of superiority jolted America to outspend the USSR in a drive that produced the internet and the global positioning system. Today’s Sputnik moment, by contrast, appears to have bypassed America’s 71-year-old president. China openly plans to dominate artificial intelligence by 2030. Mr Trump appears too busy tweeting to have noticed.

Credit tightening ‘dominoes’ threaten Asia with hidden risks; Higher interest rates could roil stock markets and upset currency flows
With Asia’s economies humming along, consumer prices rising and the U.S. edging toward higher interest rates, markets have been unloading Asian government bonds and sending long-term interest rates soaring. Expectations are growing that Asian central banks will start raising rates soon, in what could amount to “credit tightening dominoes.”

Freedom and openness in Asia Pacific open for interpretation
In the week prior to United States President Donald Trump embarking on his Asia tour, his National Security Adviser H R McMaster laid out one of the trip’s aims: ‘to promote his vision of a free and open Indo-Pacific region’

Commodity broker of the year, Asia: BNP Paribas; Energy Risk Asia Awards, 2017: Long-term focus helps bank capitalise amid
Risk staff
The past couple of years have been choppy for exchange-traded derivatives in Asia-Pacific. The region saw an overall drop in options volume of nearly 30% for 2016 on 2015 figures, while futures volume in the region increased by nearly 10% over the same period, according to FIA data. Yet in the first half of 2017, futures volume fell 12.6% against the same period in 2016, while options trading increased by 7.7%. A multitude of factors affected the different commodities markets, including challenging weather conditions which hit the agricultural sector, and the hurricane season, which rattled oil production in Houston.

Exchange News

Exchange of the year, Asia: SGX; Energy Risk Asia awards, 2017: Scale and diversity add to exchange’s offering
Risk staff
Singapore Exchange has a reputation for innovation. The integration of financial and commodity derivatives in a single market is rare in Asia-Pacific, if not unique, and the November 2016 acquisition of the Baltic Exchange in London increased its international presence. It has worked hard to develop its multi-asset model, covering equities, commodities, foreign exchange and rates on a single platform. An important element of the expansion of products is a strategy for controlled growth.

The World Federation of Exchanges publishes position paper on international regulatory dissonance
World Federation of Exchanges
The World Federation of Exchanges (“The WFE”), which represents more than 200 market infrastructure providers including exchanges and CCPs, today published a position paper discussing the implications of international regulatory dissonance, supported by a series of policy recommendations to promote better regulatory coherence.

SGX welcomes RE&S Holdings to Catalist
Singapore Exchange (SGX) today welcomed RE&S Holdings to Catalist under the stock code “1G1”.

Bursa Malaysia sees promising year ahead for IPOs
The Star
Bursa Malaysia is expecting a promising year ahead for initial public offerings (IPOs), says chief executive officer Datuk Seri Tajuddin Atan.

Regulatory News

ASIC delivers on commitment to help limited AFS licensees understand their obligations
The Australian Securities and Investments Commission (ASIC) has today released new webpage guidance and information sheets to help limited Australian Financial Services (AFS) licensees and their representatives understand their key obligations.

ASIC cancels AFS licence for failing to cooperate with an ASIC surveillance
ASIC has cancelled the Australian financial services (AFS) licence of Financial Stewards Pty Ltd (Financial Stewards) for failing to co-operate with an ASIC surveillance.

ASIC obtains orders against Gold Coast company, DanFX Trade and Daniel Ali
On 14 November 2017, the Supreme Court appointed Anthony Castley of William Buck as receiver and manager over the assets of DanFX Trade Pty Ltd, Daniel Farook Ali and associated entities. Freezing orders were also made restraining the disposal of any property (including money and securities) by Mr Ali, DanFX Trade, DanFX Investments Holdings Pty Ltd and D&S Properties Pty Ltd.

ASIC acts against Superfunded and the Goldenbergs SMSF scheme
ASIC has commenced proceedings in the Federal Court of Australia and obtained interim injunctions against Perth-based Superfunded Pty Ltd (ACN 617 328 588) (Superfunded) and its sole director, Mr Max David Goldenberg, of Currambine and its sole shareholder Mr Mark Travis Goldenberg of Claremont (the Goldenbergs). The proceedings concern their promotion of a business that encourages people to set up self-managed super funds to invest in the Superfunded Loan Investment Trust, which lends money to home buyers for their house deposits.

Investing News

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.

Mizuho to triple its square footage at former Time-Life building
By Steve Cuozzo – NY Post
In the latest mega-deal on the booming Avenue of the Americas, Mizuho Americas has signed for 270,000 more square feet at Rockefeller Group’s 1271 Sixth Ave., the former Time-Life Building at West 50th Street, The Post has learned.

BlackRock Says Asian Stocks Can Extend Rally, Boosted by China
Bloomberg News
Cautious on Asian technology stocks as valuations stretched; Japan equities still fairly valued as earnings on upswing
With Asia’s benchmark stock gauge flirting with its 2007 peak, BlackRock Inc. says it’s not too late to buy the region’s shares.


Tackling climate change will boost growth
By Etsuo Kono / Japan News
Economic growth can be achieved through countries pursuing climate-friendly policies. Anthony Cox, acting director of the Environment Directorate of the Organization for Economic Co-operation and Development (OECD), stressed in an interview with The Japan News that governments can kick-start economic growth that will build resilience against the effects of climate change with structural reforms. He also said Japan has an important role in this area. The following are excerpts from the interview with Cox.

Digital Currencies Will Not Replace Physical Money Soon: Bank of Japan Official
Reuters via US News
Financial technology is fast revolutionizing the banking industry but digital currencies will not replace physical money any time soon, a senior Bank of Japan (BOJ) official said on Wednesday.

Mainland China

Sage is latest publisher to warn of China censorship pressures; Beijing intensifies efforts against foreign-produced content
Ben Bland in Hong Kong – FT
Another leading academic publisher has been warned that it may have to censor in China or be forced out of the market, as Beijing intensifies its control over foreign education and publishing.

China is pumping a lot of cash into its economy to calm investors; China injected nearly $130 billion into its market in the last two weeks to quell a bond rout
Huileng Tan – CNBC
China has been pumping a lot of cash into its system to lift market sentiment, as the world’s second-largest economy walks a thin line between curbing debt and keeping everything running smoothly.

China clamps down on online micro lending
Reuters via Straits Times
China took steps to rein in the rapidly growing and lightly regulated market for online micro-lenders in the government’s latest crackdown on internet finance, sending shares of US-listed Chinese financial firms into a tailspin.

Xi’s China: purveyor of Asian hegemonic services
Andrew Phillips – Financial Review
Donald Trump’s no-show at the East Asia Summit last week sparked fresh anxiety from Asia watchers about Washington’s commitment to the region. These concerns are hardly new and Trump is not the first US president to bypass this summit. But his truancy comes at an especially delicate time for Asia.

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.

China’s $15 Trillion Problem: Investors Don’t Believe in Losses
Bloomberg News
Policy makers may struggle to contain moral hazard in AMPs; Regulators unveiled plans to end implicit guarantees on Friday
When China unveiled plans on Friday to end the implicit guarantees underpinning asset-management products worth trillions of dollars, it should have been a bombshell for the nation’s savers.

Hong Kong

Hong Kong stocks hit highest level in a decade; Rally sees China shares catch up to global markets, with a focus on tech securities
Alice Woodhouse in Hong Kong – FT
Hong Kong’s Hang Seng index closed above the 30,000 level for the first time in more than a decade on Wednesday driven broadly by strong earnings and particular interest in one high-flying stock, Tencent.

Muslim guide for Hong Kong
Azizul Rahman Ismail – The Sun Daily
HONG KONG is one of the most well-known ports and global financial hubs in the world. This strategically-located city in the heart of Asia attracts a countless stream of travellers for either business or pleasure or both.


Goldman’s Indonesian Morass Has a Solution in Blockchain: Gadfly
By Andy Mukherjee | Bloomberg
The crisis of confidence in Indonesia’s legal system has gone on far too long to try to fix things with conventional tools like judicial reforms. When it comes to improving the country’s notoriously iffy record in enforcement of contracts, which in Jakarta can cost up to 74 percent of a deal’s value versus 9 percent in Iceland, it’s time to use blockchain technology.

Indonesia Calls Singapore’s Bali Travel Advisory ‘Excessive’
By Yudith Ho and Rieka Rahadiana – Bloomberg
Volcano erupted on Tuesday, spouting 700-meter high ash clouds; Singaporeans should defer visits to affected areas in Bali
Indonesia said Singapore’s travel advisory to avoid parts of the vacation island of Bali following a minor eruption at Mount Agung volcano was “excessive.”


Commentary: Indonesia and Singapore, leading the way in infrastructure financing
Channel News Asia
As funding needs for large infrastructure projects across Southeast Asia intensify and bank lending tightens, HSBC finds that Indonesia and Singapore are finding new sources of funding and fresh ways to recycle existing capital.

Singapore wealth firms weather tax transparency, minister says
Singapore’s wealth management industry hasn’t seen a meaningful exodus of funds as a result of recent moves to adopt new global standards for tax transparency, according to Indranee Rajah, the city-state’s senior minister of state for law and finance.


Taiwan must try harder to prevent money laundering: Premier Lai
Focus Taiwan
Premier Lai Ching-te (賴清德) told his Cabinet on Wednesday that Taiwan has to boost its efforts against money laundering and must pass an upcoming evaluation by the Asia/Pacific Group on Money Laundering (APG).

South Korea

South Korean Police Bust $38 Million Bitcoin Ponzi Scam
Joseph Young – Cryptocoins News
Seven individuals in the South Korean province of Jeonbuk have been arrested for running a large-scale $38 million scam, alluring middle-aged investors into a ponzi scheme.


Economic growth surges in Philippines despite political risk; Government hopes buoyant economy will draw attention from drug-related killings
John Reed and Grace Ramos in Manila – FT
While human rights campaigners are keeping a grim body count of Filipinos killed during Rodrigo Duterte’s war on drugs, economic managers in the populist president’s government are trying to call the world’s attention to another number: surging GDP growth.

Filipinos’ wealth declines in 2017 as inequality widens
By Ian Nicolas Cigaral – Philstar
Filipinos’ total wealth declined in 2017, according to a report by Credit Suisse that also shows slightly increasing wealth inequality in the country.

No Sign Philippines Economy Overheating
Financial Tribune
The chief of the Bangko Sentral ng Pilipinas said the Philippine economy has not overheated yet, but if it does show signs of overheating, the central bank would be ready to step in.

Philippines cuts withholding tax on gold sales
The Philippines plans to lower the tax rate imposed on gold sales by small-scale miners in a bid to curb smuggling of the precious metal out of the country, the finance minister said on Wednesday.


Malaysia to enforce cryptocurrency regulation in 2018
Channel News Asia
Malaysia’s central bank, Bank Negara Malaysia (BNM), will designate persons converting cryptocurrencies into fiat money as reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 from 2018.


Indian households should embrace fintech to manage their money
by Laura Singleton – Imperial College London
Indian households should embrace technology to enable them to make wiser financial decisions, suggests an academic from the Business School.

Financial services industry to get its Groundhog Day commission of inquiry
by Tony Boyd – AFR
Phil the weatherman from the film Groundhog Day would appreciate the time warp inhabited by Liberal National Party senator Barry O’Sullivan, who is determined to make the financial services industry relive decades of reviews.


Australia sets up group to combat terrorism financing
Justice Minister Michael Keenan says the group will directly target and disrupt the funding lifeline of terrorist groups.

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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.