Breaking News

Asia Pacific Financial News from John Lothian – December 5, 2017

Lead Stories

Trump’s Tax Plan Triggers Ire From China to the EU
By Mark Deen , Birgit Jennen , and Viktoria Dendrinou – Bloomberg
European Union finance ministers to review U.S. legislation
Concern that tax cut could violate global trade, tax rules
As legislators in Washington work to get the most sweeping rewrite of the U.S. tax code in three decades, regions including the European Union and China are expressing their concern that the bill may not comply with international rules and frustration about the effect it may have on local markets.
https://goo.gl/2dx6Ee

Tokyo Financial Exchange Takes First Step Toward Bitcoin Futures
By Daisuke Sakai and Yuji Nakamura – Bloomberg
Working group planned to start analyzing bitcoin in January; Legislation would be needed for Japan to copy U.S. moves
One of Japan’s leading financial exchanges is starting preparations to launch bitcoin derivatives, echoing U.S. rivals that plan to list contracts tracking the cryptocurrency as soon as this month.
https://goo.gl/Lqknin

Tokyo Financial Exchange Plans for Bitcoin Futures Launch
Samburaj Das – Cryptocoinsnews.com
Taking a cue from its U.S. rivals, the Tokyo Financial Exchange is now preparing to launch its own bitcoin derivatives futures product.
https://goo.gl/EyGEVR

‘Mr LNG’ plans to pivot Jera into global trading powerhouse; Liquefied natural gas venture eyes investments as it prepares for imports to decline
David Sheppard, Neil Hume and Emiko Terazono in Tokyo – FT
The world’s largest buyer of liquefied natural gas has vowed to transform itself into a global trading powerhouse as it moves to defend its position as the biggest purchaser of the super-cooled fuel.
https://goo.gl/qDJT3R

World’s Biggest Starbucks to Open in Shanghai
Bloomberg News
China set to become biggest market within decade, Schultz says; Roastery outlet in Shanghai is key element of upscale push
Starbucks Corp. sees China surpassing the U.S. as its largest market within a decade as it counts on the country’s affluent consumers to offset stagnant growth in the rest of the world.
https://goo.gl/ZEWQwy

Exchange News

SGX, ABS, ISCA, Law Society and SID jointly launch guide on prevention of insider trading
SGX
Singapore Exchange (“SGX”), together with the Association of Banks in Singapore (ABS), the Institute of Singapore Chartered Accountants (ISCA), the Law Society of Singapore and the Singapore Institute of Directors (SID), is launching a guide on the prevention of insider trading.
https://goo.gl/ZDCVWv

ASX Monthly Activity Report – November 2017
ASX
https://goo.gl/by7MVW

FinTech News

China’s AI advances help tech, state security
New York Times
During President Trump’s visit to Beijing, he appeared on screen for a special address at a tech conference. First he spoke in English. Then he switched to Mandarin Chinese.
https://goo.gl/rsYjhJ

Regulatory News

IMF calls for caution as ‘connect’ schemes move forward
Alex Ho – Harbour Times
The International Monetary Fund (IMF) feels Hong Kong could do more to strengthen monitoring of its world-class stock market as well as the monitoring of non-bank institutions, brokerage dealers and asset managers.
https://goo.gl/pCDMCJ

Investing News

Deeply risk-averse, Japanese investors pass up Toshiba deal; Cash-strapped conglomerate turned to foreign funds, which may make a killing
JO KAWAKAMI, Nikkei
Toshiba’s surprise decision to raise some 600 billion yen ($5.34 billion) in a private placement was the most talked-about deal of the year. Its tapping of overseas funds also helped showcase the lack of Japanese investors willing to go after risky targets.
https://goo.gl/Zm9Yoz

Japan

Loan-loss reserves hit lowest level in 32 yrs
The Japan News
The total amount of loan-loss reserves booked by major Japanese banks to prepare for bankruptcies of client companies has hit the lowest level in more than 32 years.
https://goo.gl/HpRbhy

Mainland China

China plans super-grid for clean power in Asia; As hydropower hits problems, China plans renewable energy for regionAlejandro Litovsky, Earth Security Group – FT
The Belt and Road Initiative (BRI), China’s ambitious outbound investment strategy which links at least 65 countries along terrestrial and maritime trade corridors, will open massive new opportunities for trade and investment in frontier markets. Energy infrastructure investments are a backbone of BRI, so aligning these investments with sustainable development goals is necessary for China to navigate regional patchworks of social, environmental and economic priorities.
https://goo.gl/zv8yHn

China Assumes Green Power Mantle, Leaving Germany, U.S. Behind
By Brian Parkin – Bloomberg
Chinese exports of environmental goods, services have tripled; German government says it’s ok with taking a subsidiary role
Chinese exports of environmental goods and services surged ahead of Germany and the U.S., according to a report that shows how the climate change fight is shifting international trade.
https://goo.gl/khUfYu

William Watson: The Trudeau government thinks China will change for us? Get real
Financial Post
Do China’s firms make market-style commercial investment decisions or do they bend to Beijing’s strategic wishes?
https://goo.gl/ag6CaJ

China’s ICBC Financial Leasing orders 55 C919 planes
Reuters Staff
China’s ICBC Financial Leasing Co Ltd placed an order for 55 C919 planes on Tuesday, bringing the order book for China’s domestically-developed passenger jet to 785, the Commercial Aircraft Corp of China Ltd (COMAC) said.
https://goo.gl/ANFAcf

China launches new government bond yield curve benchmark
Business Times
China has introduced a new benchmark for government bond yields, creating an official point of reference for the country’s underdeveloped debt markets and marking a fresh step in efforts to encourage accurate risk pricing.
https://goo.gl/Czaxhg

Is China Ready for a Property Tax?; The announced tax is part of the Chinese government response to property market changes.
By Xinling Wang – The Diplomat
Revealing a roadmap for an annual property tax, Chinese Finance Minister Xiao Jie lately indicated that this long-awaited initiative is being fast tracked, starting a new chapter in the housing market. Xiao suggested property tax legislation will be rolled out in March 2019, followed by nationwide taxation. Charged on estimated home prices, rather than market ones, the tax will be levied by local authorities. Most importantly, the current land-related taxes and fees will be reduced in both category and value, to be gradually replaced by a single tax.
https://goo.gl/F9SHhc

Where Facebook Has No Friends, Tech Bends to China’s Will
David Ramli – Bloomberg
As he took the stage at China’s premiere internet gathering this week, Facebook Inc.’s Vaughan Smith opened with a line that wouldn’t make sense anywhere else.
https://goo.gl/4x5Ywx

Mercedes Sees a New Bumper Year in China After Edging Out Audi
By Elisabeth Behrmann
Compact sedan to be built in China to compete with BMW, Audi; Car-sharing ambitions in country need partner to make money
Mercedes-Benz, edging past long-time China luxury-car market leader Audi, expects another 2018 to be another bumper year in the world’s biggest auto market as consumer appetite for high-end vehicles like the E-Class sedan shows no signs of slowing.
https://goo.gl/qydjjr

Wary China Eyes U.S. Tax Cut as Currency Risk and Reform Chance
Bloomberg News
Commentators see pressure on balance of payments, currency; China shouldn’t let own reform agenda be disturbed: Researcher
Chinese officials and commentators are greeting the news of the biggest U.S. tax overhaul in three decades with a mixture of concern over the potential market impact and a sense that opportunity to push further reforms at home has arrived.
https://goo.gl/5MPpSb

Hong Kong

Hong Kong financial boss Ivan Chan receives life sentence at retrial for murdering his mistress; The jury returns 6-1 majority guilty verdict after less than five hours of deliberation
Jasmine Siu – South China Morning Post
A finance company director who took six years to admit that he killed his mistress and dumped her body in a rubbish trolley parked outside a Hong Kong village was sentenced to life in prison on Tuesday after he was found guilty of murder for the second time.
https://goo.gl/emfgP4

Singapore

Old Mutual Creates Wealth Role in Singapore
Finews.asia
Old Mutual International announced a new position supporting the wealth managers focus on high net worth individuals in Singapore.
https://goo.gl/UfkoSD

Thailand

HNA eyes US$43b Thai economic zone as it aligns shopping spree with China’s state policies
South China Morning Post
HNA Innovation Finance and CT Bright will contribute equally to 20 per cent of a fund, which may reach US$5 billion next three to five years, to invest in Thailand’s US$43 billion Eastern Economic Corridor project.
https://goo.gl/2cAAJu

Taiwan

Taiwan’s forex reserves hit new high in November
CNA
Taiwan’s foreign exchange reserves at the end of November hit a new high on the back of an increase in returns on funds managed by the central bank, the bank’s data showed Tuesday.
https://goo.gl/guzNe7

Taiwan-UK economics and trade consultation wraps up in London; Representatives of the two countries pledged to expand collaboration
By Taiwan Today
The annual Taiwan-U.K. consultation on economics and trade wrapped up Dec. 1 in London, with the two sides pledging to expand collaboration across the board, the Ministry of Economic Affairs said.
https://goo.gl/EtT1TS

South Korea

Trump’s tweets have more of an effect on market volatility than North Korean missile tests, finds Goldman Sachs
Lucy White – City AM
Investors trading in the Vix might find it useful to predict Trump’s reaction (Source: Getty)
Whether US President Donald Trump is making any headway in his campaign to Make America Great Again is hard to gauge. But there is one area where he is having a quantifiable impact, according to Goldman Sachs: market volatility.
https://goo.gl/JhfhYf

South Korea Launches Cryptocurrency Task Force to Spearhead Regulations
Bitcoin.com
South Korea’s government has established a new task force to regulate bitcoin and other cryptocurrency trading. Taking over the effort from financial regulators, the Ministry of Justice has now been put in charge of the task force to establish and implement cryptocurrency regulations.
https://goo.gl/3L9pYj

UAE, South Korea Among 17 Tax Havens Blacklisted by European Union
News18.com
EU finance ministers approved a common blacklist on Tuesday made up of American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and United Arab Emirates.
https://goo.gl/4hxayz

How to Spy on Kim Jong Un’s Nuclear Plans From 6,000 Miles Away; Analysts engage in a high-stakes guessing game to determine what moves the rogue regime will make next
By Kristine Servando – Bloomberg
When North Korea unleashed an earth-shaking nuclear bomb of as much as 250 kilotons on Sept. 3, one man wasn’t fazed.
https://goo.gl/aXnaSD

Philippines

ADB offers $3.68 B loans to Philippines
By Mary Grace Padin – The Philippine Star
The Philippine government may be able to secure $3.68 billion in sovereign loans from the Asian Development Bank (ADB) in the next three years, the Department of Finance (DOF) said yesterday.
https://goo.gl/GY4m9G

Philippines Joins the Ranks of Countries Regulating ICOs
Bitcoinist.com
Initial coin offerings (ICOs) can easily net millions of dollars from enthusiastic investors, but a number of countries are starting to regulate them. The Philippines is the latest country to join this growing club.
https://goo.gl/Dd9Rz5

Malaysia

The truth behind Khazanah Nasional’s financials
By Bernama – Straits Times
KUALA LUMPUR: With net assets worth well over RM100 billion, Malaysia’s sovereign wealth fund, Khazanah Nasional Bhd, is in the best position to outdo most other corporate entities on the media front if it wants to.
https://goo.gl/zVLNoU

Malaysia 1MDB Scandal Is ‘Kleptocracy at Its Worst,’ Sessions Says
By Elffie Chew – Bloomberg
Some $4.5 billion were allegedly laundered via opaque deals; Justice seeking to seize $1.8 billion in assets linked to 1MDB
The alleged corruption related to a Malaysian state investment fund is “kleptocracy at its worst” and the U.S. is working to provide justice to the victims, Attorney General Jeff Sessions said on Monday.
https://goo.gl/YzSRBu

India

‘India will be data rich before getting financially rich’
V RISHI KUMAR – The Hindu Business Line
Empowerment of the next billion through digital platforms and financial services will bring about a major transformation in the electronic commerce and delivery of services, inspiring a generation of entrepreneurs.
https://goo.gl/sGYqzF

15th Finance Commission: To realise the goals under new India 2022, here is what Centre must remember
Financial Express
The centre would do well to remember that Offsetting the fiscal disabilities of the states is critical to achieving and realising the goals under New India 2022
https://goo.gl/Qc32dN

Indian prison system worse than Russia, Vijay Mallya trial told
Financial Express
India’s prison system came under the scanner at the extradition trial of liquor baron Vijay Mallya at Westminster Magistrates’ Court here today when it was compared to extreme conditions in Russia.
https://goo.gl/nqS4sN

UAE operationalises $75 bn sovereign fund for India: Envoy
Financial Express
In a major move to further boost bilateral economic ties, the United Arab Emirates (UAE) has operationalised a $75 billion sovereign fund for India of which USD one billion has already been transferred, the Gulf nation’s envoy said today.
https://goo.gl/eY7Uqh

Australia

Hayne royal commission a threat to stability: David Murray
by Jonathan Shapiro – AFR
The banking royal commission threatens the safety of deposits because it could dampen the ability of lenders to rely on strong contracts to enforce their security, David Murray, the chairman of the 2014 financial system inquiry, has argued.
https://goo.gl/Fbvt7N

Brisbane woos global event planners with Jeff Horn, Li Cunxin
by Mark Ludlow – AFR
Brisbane – long seen as the poor cousin of Sydney and Melbourne when luring lucrative Asian tourists – is moving to capitalise on a new era of tourism in Australia’s third largest city to secure a slice of the lucrative business events market.
https://goo.gl/ofavQP

Dual-Nationality Fiasco May Claim More Australian Lawmakers
By Jason Scott – Bloomberg
At least two Labor lower-house members may have breached law; Turnbull has vowed to refer suspected Labor cases to court
The citizenship fiasco that’s gripped Australia’s parliament for the past five months and cost Prime Minister Malcolm Turnbull’s government its majority looks set to widen, with a public register published Tuesday showing more lawmakers may have breached the constitution.
https://goo.gl/sdPMXf

Australia Seeks Foreign-Meddling Curbs After China Dust-Up
By Jason Scott – Bloomberg
New legislation will update espionage and treason definitions; Political lobbyists obliged to register ties to foreign powers
Australian Prime Minister Malcolm Turnbull said he would introduce legislation to limit political meddling by foreign powers, citing reports of Chinese influence over a local lawmaker and Russia’s U.S. election interference.
https://goo.gl/pRGehH

La Nina Pattern Forms in Tropical Pacific Ocean, Australia Says
By Rebecca Keenan – Bloomberg
Climate models suggest event will be weak, short-lived: Bureau; U.S. has said La Nina has 64% chance of lasting to March
A weak La Nina weather pattern has formed in the Pacific Ocean, Australia’s weather bureau declared, and the event may bring wet weather to cropping and coal mining regions in the nation.
https://goo.gl/pV7D7V

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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.