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Asia Pacific Financial News from John Lothian News – November 9, 2017

Lead Stories

China approves interbank bond derivatives trade for overseas investors
Reuters Staff
China’s central bank said on Thursday that foreign investors would be permitted to trade in bond derivatives in the country’s interbank market.
https://goo.gl/CFXzx8

2 Chinese investors drop out of bid for Chicago Stock Exchange
Nereida Moreno – Chicago Tribune
Two of the three China-based bidders for the Chicago Stock Exchange have withdrawn from a group trying to acquire the market, officials said Wednesday.
https://goo.gl/pE3kpk

Former Bitcoin King Is Bankrupt—And He Could Get Rich Again; Rise in cryptocurrency’s price means former CEO of exchange could be in for windfall of hundreds of millions of dollars
By Kosaku Narioka – WSJ
Creditors of the collapsed Japanese bitcoin exchange Mt. Gox are on course to miss out on the recent surge in bitcoin prices. Instead, it is the exchange’s former chief executive, now on trial for embezzlement, who could turn a handsome profit.
https://goo.gl/pWoz27

Remembering the Golden Age of Open-Outcry Markets; I worked on the Chicago Board of Trade floor. I couldn’t imagine doing anything else.
Lawrence Schneider – WSJ
I empathize with David Tung Wai’s sadness for watching the demise of the Hong Kong stock exchange trading floor (“At 87, a Stogie-Toting Legend Mourns the End of Trading Floors,” page one, Oct. 26). My first visits to the Chicago Mercantile Exchange began in 1956, when I would go downtown to visit my father and grandfather who traded for themselves, speculators and their butter, egg and onion hedging clients. I started working on the CME floor in 1967 and later on the Chicago Board of Trade floor, first in high school and then as a college student. I couldn’t imagine doing anything else. Years later I taught courses for the CME as men and women flocked to Chicago to learn the art of open outcry. I recall how crowded the visitors’ galleries were. The trading floors in the 1970s and ’80s were major tourist attractions for the city of Chicago. But like the village blacksmith or the attendant who’d pump your gas and clean your windshield, technology changed the way stocks and derivatives will forever be traded.
https://goo.gl/omxDAn

ASEAN looks to the Fourth Industrial Revolution
Jayant Menon and Anna Fink, ADB – East Asian Forum
When the leaders of the Association of South East Asian Nations (ASEAN) gather for the 31st ASEAN Summit in the Philippines in November 2017, they will also celebrate ‘ASEAN at 50’ — a testimony to ASEAN’s endurance and durability as the longest-running regional grouping of developing countries in the world.
https://goo.gl/dk6y28

Asia fintech investment coming of age: KPMG; KPMG report says activity was still driven by China in Q3, despite the curbs imposed by Beijing
JAMIE LEE – Business Times
STRONGER signs of maturity from fintech investment trends in Asia emerged in the third quarter, with Chinese corporates having expanded beyond their domestic market to reach into South-east Asia, a KPMG report has said.
https://goo.gl/P5qdaq

Dissecting the $250 Billion China Deals Trump Got for U.S.
By Bruce Einhorn – Bloomberg
Pacts include imports to China spanning helicopters to beef; Many agreements are tentative, involve existing partnerships
How does $250 billion in deals get sliced? The White House has unveiled a slew of agreements with China as President Donald Trump seeks to address an imbalance in trade. While Commerce Secretary Wilbur Ross boasted a total of $250 billion in business deals, getting to that figure may require some fuzzy math.
https://goo.gl/UCu1Y5

Abe Fell in Bunker During Golf Game With Trump, Japanese TV Station Says
THE ASSOCIATED PRESS
Japan’s prime minister said his round of golf with visiting President Donald Trump was a good chance to relax and discuss difficult issues.
https://goo.gl/qNNQXt

Exchange News

HKEX Sees Mainland Stock Connect Strategy Start to Pay Off
By Benjamin Robertson – Bloomberg
Revenue from trading links more than doubled year-on-year; Connections with mainland markets a central part of strategy
Hong Kong Exchanges & Clearing Ltd.’s plan to be the gateway to the world’s second-biggest stock market seems to be slowly but surely paying off.
https://goo.gl/1611k9

JPX Monthly Headlines -October 2017
JPX
JPX group companies undertake various initiatives and disseminate information with the aim of providing the most attractive markets to all users.
https://goo.gl/ZEzLrG

Eurex KOSPI Product: Changed trading hours on 16 November 2017
Eurex
Due to the South Korean Exam Day, continuous trading of the Eurex KOSPI Product (OKS2) will start on 16 November 2017 at 11:00 CET (regular: 10:00 CET).
https://goo.gl/Lt7RcS

SGX welcomes Keppel-KBS US REIT to Mainboard; Singapore Exchange (SGX) today welcomed Keppel-KBS US REIT to Mainboard under the stock code “CMOU”.
SGX
Keppel-KBS US REIT is a Singapore real estate investment trust with an initial portfolio of 11 income-producing commercial assets in seven cities across the US. The REIT Manager is jointly owned by Keppel Capital, the asset management arm of Keppel Corporation and a premier manager of real estate assets in Asia, together with KBS Pacific Advisors Pte Ltd., an established commercial real estate investment manager in the US – both of which are also the sponsors of Keppel-KBS US REIT.
https://goo.gl/A9bnGS

FinTech News

Financial tech startup WeLab raises $220M from investors including Alibaba, the IFC and Credit Suisse
Catherine Shu – TechCrunch
WeLab, a financial tech startup that operates online lending platforms in Hong Kong and China, has raised $220 million in combined equity and debt financing. The round, which WeLab says is its Series B+, brings its total funding so far to $425 million. Investors include the Alibaba Hong Kong Entrepreneurs Fund, the World Bank’s International Finance Corporation (IFC) and Credit Suisse, which also acted as the round’s placement agent.
https://goo.gl/Rcdy4D

Bitcoin’s Exorbitant Energy Costs May Prove to Be Biggest Risk
By Sid Verma – Bloomberg
Citigroup says long-term consumption comparable to Japan; Shift in network model seen as key to cryptocurrency’s future
It may not matter whether bitcoin’s a bubble. The staggering energy costs associated with “mining” the digital currency could prove to be its downfall.
https://goo.gl/bw77J6

Regulatory News

China’s financial sector welcomes a super regulator; Committee’s mandate includes deliberating major reform and development programs for the financial sector
ASIA TIMES
China has set up a Financial Stability and Development Committee under the State Council and appointed Ma Kai, one of the four Vice Premiers of China, as the director, according to Xinhua news agency.
https://goo.gl/XnGnpm

Operators of ‘binary options trading boiler room’ convicted and sentenced
ASIC
Following an ASIC investigation, Jana Jaros and Jackson Laurence Malcolm Capper were convicted and sentenced for operating a financial services business without a licence and lodging false documents to ASIC containing false or misleading material.
https://goo.gl/1AVrZF

Investing News

Outstanding CEO of the Year: Sun Life Financial’s Dean Connor almost makes insurance sound cool; un Life CEO sets bold company goals, loves technology and has a thing for a digital assistant named Ella
Andy Holloway – Financial Post
Dean Connor may never have imagined that he would be leading an insurance company at this or any other stage in his career, but he’s certainly made the most of his six-plus years as CEO of Sun Life Financial Inc. Starting with a bold pronouncement in 2012 that Sun Life was going to increase annual earnings by a third to $2 billion by 2015, Connor has not been shy about getting the most out of his employees and that drive starts right from the outset.
https://goo.gl/aRiwbA

Japan

Japan clashes with South Korea over shrimp snub at Trump dinner; Tokyo protests after US president served seafood from disputed Dokdo islands
Bryan Harris in Seoul – FT
When Donald Trump visited Japan and South Korea this week, he hailed the strength of the US’s Asian alliances in tackling the threat from North Korea.
https://goo.gl/YgZBEY

Japan’s MUFG seeks $1.8 billion Bank Danamon stake in southeast Asia push: sources
Taro Fuse, Anshuman Daga – Reuters
Mitsubishi UFJ Financial Group (MUFG) (8306.T) is in talks to buy a 40 percent stake in Bank Danamon Indonesia (BDMN.JK) for around 200 billion yen ($1.75 billion), a person with direct knowledge of the talks told Reuters on Thursday.
https://goo.gl/S431WY

Japan’s demographic lessons for Europe
By Admin – NewVision.co.ug
Another lesson from Japan is that a country with a large savings surplus can handle a large public debt, because it can be financed internally
https://goo.gl/b3qsSx

Japan’s Biggest Banks Confront Harsh Reality With Cost Overhaul
By Gareth Allan and Yuki Hagiwara – Bloomberg
Mizuho is said to weigh cutting third of workforce in 10 years; BOJ says lenders’ overcapacity is putting pressure on profit
Years of shrinking interest rates, demographic challenges and threats from rapidly advancing technology are finally coming to a head at Japan’s biggest banks as they prepare to eliminate thousands of positions and downsize branches.
https://goo.gl/6s6CjF

Mainland China

China to ‘Substantially’ Ease Access to Financial Industry
Alfred Liu and Jun Luo – Bloomberg
Statement follows Xi Jinping meeting with Donald Trump; China urges U.S. to push forward CICC financial license
https://goo.gl/LBEX9Z

China pledged to keep nudging open the door to its mammoth financial industry — but it will do so at its own pace.
On Thursday, amid a slew of Sino-U.S. dealmaking during President Donald Trump’s visit to China, the Foreign Ministry said entry barriers to sectors such as banking, insurance, securities and funds will be “substantially” eased. That will happen “in accordance to China’s own timetable and road map,” the ministry said, following a meeting between Trump and his counterpart Xi Jinping.
https://goo.gl/LBEX9Z

Xi’s Economic Adviser Poised for Key Role in China Debt Cleanup
Bloomberg News
Liu He seen as ‘the brain’ behind supply-side reform efforts; Economist is viewed as a combination of Summers and Bernanke
Liu He, a key adviser to Chinese President Xi Jinping known for guiding economic policy behind the scenes, appears destined to occupy more of the spotlight.
https://goo.gl/BMW9rn

CIC, Goldman Sachs establish China-U.S. industrial cooperation fund -U.S. State depart
Reuters Staff
China Investment Corp (CIC) and Goldman Sachs have signed a strategic agreement to establish a China and United States industrial cooperation fund on the sidelines of a state visit to Beijing by U.S. President Donald Trump.
https://goo.gl/7AYrgu

Hong Kong

Hong Kong’s Real Bull-Market Killer
Shuli Ren – Bloomberg
Chinese investors are piling into Hong Kong stocks again, but they’re being choosy, treating two peas from the same pod in different ways.
https://goo.gl/dNcpKu

Hong Kong’s SFC Warns Against Yet Another Unauthorised Firm; The SFC routinely warns about such scams operating in Hong Kong.
Aziz Abdel-Qader – Finance Magnates
Hong Kong’s Securities and Futures Commission (SFC) has issued a statement cautioning investors about International Trading, which has been offering financial services to the public without being authorised to do so, according to an SFC statement.
https://goo.gl/Jei9yL

Indonesia

Meet Indonesia’s Jack Ma who is building an e-commerce platform minus the discounts & COD
DOLA SAMANTA – YourStory.com
E-commerce major Tokopedia uses simple solutions to overcome challenges in a country spread over 17000 islands where a majority of the population is unbanked.
https://goo.gl/fuEbs9

Vietnam

UK’s Financial Times praises Vietnam’s preparations for APEC 2017
Vitenamnet.vn
The UK’s Financial Times on November 8 published an article lauding preparations for the Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Week by Vietnam and the central city of Da Nang in particular.
https://goo.gl/FVXP2E

First Vietnam Real Estate Forum to be held
Viet Nam News
Chairman of the Vietnam Real Estate Association Nguyễn Trần Nam (middle) introduces the first annual Vietnam Real Estate Forum. — VNA/VNS Photo Thu Hằng
https://goo.gl/9FsE8d

Taiwan

Taiwan’s premier insists employees want flexible work-hour system
Focus Taiwan
Taiwan’s Premier Lai Ching-te (賴清德) on Thursday insisted workers also wanted a flexible work-hour system as labor rights groups criticized his Cabinet’s approval of amendments to a law that had restricted how much businesses can ask their employees to work, to allow companies flexible use of work hours.
https://goo.gl/avAEA2

Philippines

BSP keeps interest rates intact
By Lawrence Agcaoili – The Philippine Star
he Bangko Sentral ng Pilipinas (BSP) kept interest rates unchanged yesterday, but raised the inflation forecast for 2018 amid rising oil prices, higher liquidity in the financial system and the weak peso.
https://goo.gl/qMPuDB

Indonesia seeks PH investments
By Myla Iglesias – Malaya.com.ph
The Indonesian government is urging Philippine companies to invest in the country’s infrastructure projects particularly in geothermal power plants, said Bambang Brodjonegoro, minister of National Development Planning of Indonesia.
https://goo.gl/CpD19o

Malaysia

Breakingviews – Malaysia throws cash into middle-income trap
William Pesek – Reuters
Prime Minister Najib Razak says his 2018 “mother of all budgets” will propel Malaysia into the ranks of the world’s top economies. Its $1.5 billion of handouts will enrich farmers, fishermen, rubber traders and other interests. In terms of upgrading competitiveness, it falls woefully short.
https://goo.gl/q1QGLM

Malaysia Signals Shift to Tightening Stance on Growth View
By Pooi Koon Chong – Bloomberg
Pressure rising for Southeast Asia to start tightening policy; Malaysia seen as among first to move in region next year
Malaysia’s central bank left interest rates unchanged while signaling borrowing costs may start to rise as economic growth gains momentum.
https://goo.gl/vFEPJu

India

India to see 10% salary increase in 2018: Report
Financial Express
Salaries are projected to increase by 10 per cent in India in 2018, the highest in the Asia Pacific region, according to a report.
https://goo.gl/FxivUg

State Bank of India eyes profitable expansion outside home
Financial Express
State Bank of India (SBI) will open more branches in Nepal and consider options to re-enter Vietnam under a three-year goal to grow its international operations to as much as 15 percent of total business, a senior executive said.
https://goo.gl/zzbstR

Australia

Appleby lawyers hatched plan to set up Australian office but avoid tax there; Secret proposal to set up stealth office in Sydney or Melbourne was named ‘Project Painkiller’
Christopher Knaus – The Guardian
Lawyers at the firm at the centre of the Paradise Papers hatched a secret plan to set up an office in Australia but avoid paying tax in the country, leaked documents reveal.
https://goo.gl/bRyiaz

Landmark High Court ruling spells ‘death knell’ of pre-nuptial agreements in Australia, experts say; A COURT ruling in a dispute between a young woman and her deceased ex-husband’s estate has sent shockwaves through the legal community.
Frank Chung – News.com.au
IN 2005, Kanye West delivered some sage advice to all wealthy men thinking of entering into marriage with money-hungry women, disparagingly referred to as “gold diggers”.
https://goo.gl/kSScz4

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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.