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Asia Pacific Financial News from John Lothian News – December 11, 2017

Lead Stories

China’s ethical bonds take it to top spot in green paper league; Country is joint-largest source of issuance, along with France
Kate Allen and James Kynge in London – FT
Chinese banks are using ethically labelled bonds to refinance existing loans, helping to propel the country to become the world’s biggest issuer of green paper.
https://goo.gl/VHPJJr

DEUTSCHE BANK: A major financial crisis is almost twice as likely in China as anywhere else in the world
Will Martin – Business Insider
The probability of a financial crisis starting in China is almost twice as high as in any other major global economy, according to new research from analysts at Deutsche Bank.
https://goo.gl/RGpqrZ

China goes on logistics buying spree to support ‘new Silk Road’; Acquisitions across Eurasia to enhance trade flows double to $32.2bn
James Kynge in London – FT
A push by some of China’s largest companies to dominate the global logistics industry — reinforced by government calls to build a “new Silk Road” — is driving a surge in Chinese acquisitions overseas of warehousing, trucking and other logistics operators.
https://goo.gl/jZZUQQ

Annoying office drone forces overworked Japanese employees to knock off at night
By Amanda Woods – MarketWatch
A Japanese company has created a torturous new device to force overworked employees out of the office at night — a drone that buzzes around blaring “Auld Lang Syne.”
https://goo.gl/k6WGBP

HSBC set free from deferred US criminal charges; Department of Justice decision lifts five-year threat of prosecution hanging over bank
Martin Arnold in London – FT
The US Department of Justice has given HSBC a significant boost by dismissing the deferred criminal charges that have been hanging over the bank since it was fined for money laundering and sanctions breaches five years ago.
https://goo.gl/Ngfufm

World’s Largest Water Diversion Plan Won’t Quench China’s Thirst
Bloomberg News
$40 billion spent so far on aqueducts to feed northern cities; Government taps technology, boosts food imports to save water
Autumn rains came too late to save the stunted stalks of Shu Xinguo’s corn crop, withered by a dry July growing season.
https://goo.gl/eD1VZV

Exchange News

Singapore exchange to increase derivatives trading fees; Annual levies to rise as much as 10-fold to S$25,000 from next year
Emma Dunkley in Hong Kong – FT
The Singapore Exchange is to increase fees as much as 10-fold for derivative trading members next year, following a recent large technology upgrade.
https://goo.gl/ibJLT3

North Korea is hacking bitcoin exchanges as currency value soars, expert says
By Katherine Lam – Fox News
As bitcoin’s value continues to surge, North Korean hackers are taking advantage by targeting exchanges to gain financial profit, experts said on Friday as sanctions against Kim Jong Un’s regime threaten to impede on economic development.
https://goo.gl/g3nUr5

FinTech News

Financial technology to lead the way for Cambodia’s growing startup scene
Southeast Asia Globe
The founder behind a Cambodian startup predicts that e-commerce is growing too slowly. Fintech, he says, and a good payment system must come first before everything else follows
https://goo.gl/TfVbGu

How asset managers like FinEx Asia are using AI to disrupt traditional bank lending
SCMP
By partnering with fintech firm Dianrong, the newly licensed asset manager is using machine-learning and blockchain technologies to minimise risk
https://goo.gl/FuqZ3C

Ant Financial appoints new General Manager, Cross-border Business for South and Southeast Asia Alipay
By Digital News Asia
ANT Financial Services Group (“Ant Financial”, or the “Company”) today announced the appointment of Cherry Huang as General Manager, Cross-border Business for South and Southeast Asia of Alipay. Huang will lead business operations and growth in the region to further strengthen Alipay’s payments platform leadership through enabling cross-border transactions.
https://goo.gl/FPX4GX

Asian investors embrace bitcoin, but regulators are wary
Financial Post
The weekend launch of a U.S. futures contract for bitcoin reflects widespread acceptance of the virtual currency, especially among investors in Asia, though regulators are wary.
https://goo.gl/qwVeDc

Thomson Reuters platform to help further develop Hong Kong’s fintech offerings
South China Morning Post
News and data giant says platform can help fintechs distribute their products (at a fee) as well as use its technology, tools and data to create products, for free
https://goo.gl/W1pzmj

Regulatory News

China FX regulator says will push forward two-way opening of financial market
Reuters
China’s foreign exchange regulator will push forward two-way opening of the country’s financial market and fend off risks from cross-border capital flows, the head of the State Administration of Foreign Exchange said on Monday.
https://goo.gl/kspdkU

ASIC’s MoneySmart Teaching Program makes a difference in school communities
ASIC
ASIC’s MoneySmart Teaching Program aims to strengthen the financial capability of students across Australia. An independent evaluation found that the Program supports stronger student financial literacy and greater engagement with teachers and the wider school community in financial literacy education.
https://goo.gl/zF4ya3

10 Japanese Cryptocurrency Exchanges and Tokyo Police Unite to Fight Cyber Crime
Bitcoin.com
Ten Japanese cryptocurrency exchanges have signed an agreement with the Tokyo Metropolitan Police Department to collaborate to prevent cyber crime. Along with growing bitcoin adoption in Japan is the number of cybercrime cases including unauthorized access to online accounts and money laundering.
https://goo.gl/nBKPsm

China Levies Large Fine on Bank Over Bond Guarantees; Penalty is a sign Beijing is ramping up crackdown on ways banks have been hiding risks
By Chao Deng in Beijing and James T. Areddy in Shanghai – WSJ
China’s banking watchdog fined a midsize bank more than $100 million for its role in a bond default last year, one of the largest penalties levied on a Chinese bank and a sign Beijing is ramping up a crackdown on ways banks have been hiding risks.
https://goo.gl/aDAWHu

Chinese Regulator Cracks Down on Booming Hedge-Fund Industry
Bloomberg News
Regulator says it’s probing 10 cases involving private funds; CSRC cites misuse of Shanghai-Hong Kong stock connect
China’s securities regulator is cracking down on the fast-growing hedge-fund industry, investigating 10 cases of alleged wrongdoing.
https://goo.gl/Efo51Z

China Audit Finds Provinces Faked Data and Borrowed Illegally
Bloomberg News
Fiscal revenues inflated, building sales faked to boost income; Xi had ordered data fraud ‘throttled’ after string of scandals
China found some local governments inflated revenue levels and raised debt illegally in a nationwide audit, a setback for Beijing in its bid to boost the credibility of economic data after a run of scandals.
https://goo.gl/3LBBZJ

Investing News

HNA Unit Bonds Fall to Record Amid Concern of Lender Support
By Denise Wee – Bloomberg
Bonds of a unit of HNA Group Co. have fallen to record lows after fresh signs that the debt-laden Chinese conglomerate is facing increasing difficulties raising funds.
https://goo.gl/CciDKD

Man Group to launch quant hedge fund in China; Company to use algorithms to trade across liquid markets and focus on listed futures
Lindsay Fortado – FT
Man Group is launching a quantitative hedge fund in China that it will market to wealthy Chinese investors as it becomes the first foreign investment company to start an onshore hedge fund in the country.
https://goo.gl/kcVaUo

Saving for retirement the top financial goal for those in Asia: survey
NISHA RAMCHANDAN – Business Times
SAVING for future retirement is the highest-ranking goal among Asians, the Prudential Relationship Index (PRI) for 2017 showed.
https://goo.gl/rKHiiC

Bank of Japan’s $150 Billion ETF Binge Looks Likely to Slow Next Year
By Min Jeong Lee and Emi Urabe – Bloomberg
BOJ will cut annual target by a third, UBS and Daiwa SB say; Bank currently aims to spend $53 billion a year on ETFs
As stocks surge and consumer prices inch higher, investors say it’s time for the Bank of Japan to reduce equity purchases that have been criticized for distorting the market.
https://goo.gl/4B9aVJ

Japan

Japan’s competition watchdog at odds with financial sector over mergers; Customer convenience of prime importance as JFTC official asks, ‘Consolidation for whom?’
RYOHEI YASOSIMA, Nikkei
Akinori Yamada, secretary general of the Japan Fair Trade Commission, speaks about mergers involving regional banks at a press conference in Tokyo on Wednesday.
The rift is widening between Japan’s regional banks and the Japan Fair Trade Commission, even as the competition watchdog continues to deny it is hindering integration deals.
https://goo.gl/kJ6ezH

Finding the best deal in Japan’s all-you-can-eat economy; Tokyo’s retailers rein in their offers as consumers’ disposable income starts to rise
Leo Lewis – FT
For Tokyoites seeking party season preparation that combines glamour with a gamble, the city’s beauty salons offer the matsueku-tsukehoudai — a flat-fee “all we can affix in an hour” deal on eyelash extensions.
https://goo.gl/QFJZQr

Bitcoin latest: Japan pushing cryptocurrency’s HUGE growth claims exchange chief; JAPAN exchange bitFLyer is said to be at the heart of bitcoin’s recent surge as the exchange said its investors are fuelling the cryptocurrency’s huge increase in value.
By DARIUS MCQUAID – Expresss
Yuzo Kano, chief executive of bitFlyer a Japanese trading platform for bitcoin said his Tokyo-based exchange was big enough to handle even the biggest market movements.
https://goo.gl/4mw6Md

Japan floated 50% more bonds for small investors this year; JGBs emerge as attractive alternative to low-interest bank deposits
Nikkei
Japanese government bonds tailored for retail investors have grown increasingly popular, prompting the Ministry of Finance to issue a record amount of the instruments this year.
https://goo.gl/efj7DA

EU, Japan and US to ramp up trade pressure on China; Three economies will target ‘severe excess capacity’ in sectors like steel
Shawn Donnan in Buenos Aires – FT
The EU, Japan and the US are set to announce a new alliance to take on China more aggressively over trade issues such as overcapacity in steel and forced technology transfers, in a rare effort at international economic co-operation by the Trump administration.
https://goo.gl/xKdF5T

Mainland China

Isis use of hobby drones as weapons tests Chinese makers; Proliferation of recreational aircraft in aerial bombing poses problem for industry
Charles Clover and Emily Feng in Beijing – FT
With a wingspan of more than two metres, the X-8 commercial drone manufactured by China-based Skywalker Technologies is a favourite among hobbyists and aerial photography enthusiasts.
https://goo.gl/GRgYUw

How China’s Debt Crackdown Could Start Weighing on the Economy
Bloomberg News
Investment in infrastructure and property is seen decelerating; Companies face higher financing costs as bond yields increase
China’s sweeping deleveraging push is poised to inflict more pain next year.
Authorities tightening funding in financial markets and reining in excessive borrowing will likely deal a blow to investment in infrastructure and property, while soaring corporate funding costs may damp business expansion.
https://goo.gl/povMr2

Delays and suspicions dog China-US investments; Push to reform reviews would bring unprecedented scrutiny to cross-border deals
Ben McLannahan in New York and Shawn Donnan in Washington – FT
A growing number of Chinese investments targeting US companies are stalling because of a slowdown in Washington’s national security review process, and as trade tensions rise between Beijing and Donald Trump’s administration.
https://goo.gl/974eRU

New Zealand security chiefs warn of China threat; Agencies call for robust response from new government to Beijing’s drive for influence
Jamie Smyth in Sydney – FT
New Zealand’s security chiefs have called for a more vocal government response to national security threats after a spate of spying incidents highlighted Beijing’s attempts to influence the country’s growing Chinese community.
https://goo.gl/9RLj1i

Germany says China seeking to ensnare officials on LinkedIn; Security service says Chinese agencies using fake profiles to ensnare politicians
Tobias Buck in Berlin – FT
Chinese intelligence agencies are using social networks such as LinkedIn to establish contact with German politicians and officials, according to a study by Germany’s internal security service.
https://goo.gl/oHLn2P

Hong Kong

Hong Kong’s Ferris wheel to reopen after three months’ halt; New operator TECL expects to win back tourists by slashing ticket prices
YASUO AWAI, Nikkei
The Hong Kong Observation Wheel in the Central harborfront district (UIG/Getty Images)
HONG KONG — Promising stunning views of Hong Kong’s million-dollar skyline in a luxurious gondola, the Hong Kong Observation Wheel has been a landmark in the city’s Central harborfront district since its grand opening in 2014. Yet, caught in an ugly tug-of-war between two operating companies, the wheel has been still and silent for more than three months.
https://goo.gl/1A8jwk

Indonesia

Indonesia, Malaysia and Thailand seek to boost local currency settlement
Reuters
The central banks of Indonesia, Malaysia and Thailand launched a framework on Monday aimed at increasing direct settlement of transactions in their local currencies to reduce the current dependence on the U.S. dollar.
https://goo.gl/gtpK3b

Indonesia seeks control of aluminum supply chain; Inalum bets on new holding structure to finance ambitious expansion
ERWIDA MAULIA, Nikkei
Employees at Indonesia Asahan Aluminium, the country’s only aluminum producer, looked cheerful as for the first time in many years they welcomed dozens of journalists from major publications in Jakarta. The physically remote and reticent company has recently come under the spotlight following its appointment as the holding company for three state-owned miners.
https://goo.gl/rMYibo

Singapore

ITE students trained to teach financial planning
Toh Yong Chuan – Straits Times
In a novel move, Institute of Technical Education (ITE) students are being trained to teach their schoolmates financial planning, in a bid to give the students a lift in life.
https://goo.gl/aXaQEz

Saving for retirement a key financial goal among Asians: Poll
Straits Times
Saving for their golden years is a top financial goal among Asians, according to a survey out yesterday.
https://goo.gl/Ma4bnN

Vietnam

Vietnam Suffers Rare $1 Billion Natural Catastrophe Loss: Aon Benfield Report
InsuranceJournal.com
Typhoon Damrey made landfall in Vietnam during November as a Category 2 strength storm, bringing estimated economic damages of VND22.1 trillion (US$1.0 billion) – a rare billion-dollar event for the country, according to Impact Forecasting, Aon Benfield’s catastrophe model development team.
https://goo.gl/KqsRMH

New SBV decree to ease gold trading regulations
Thiên Lý – Vietnamnews
The State Bank of Việt Nam is collecting feedback for a decree on gold trading, which will include a monopoly for the central bank on accepting gold deposits.
https://goo.gl/Ajy3LP

Taiwan

Taiwan outlines security plans to battle hackers
Channel News Asia
Taiwan must boost its information security systems to protect against hackers who target the island’s financial services and banking systems, President Tsai Ing-wen said on Monday, unveiling a three-pronged strategy against attacks.
https://goo.gl/PQLjnZ

Taipei mayor pledges to minimize cash transactions at city markets; Taipei Mayor Ko Wen-je reaffirmed his commitment to “make cash and coin disappear” from business transactions in Taipei City during the inauguration ceremony for smart payment services at the Taipei Fish Market
By George Liao – Taiwan News
aipei Mayor Ko Wen-je (柯文哲) reaffirmed his commitment to “make cash and coin disappear” from business transactions in Taipei City during the inauguration ceremony for smart payment services at the Taipei Fish Market on December 11.
https://goo.gl/7c9t5k

South Korea

South Korea considers ban on bitcoin trade; As futures trading begins in Chicago, Seoul may follow Asian neighbors
KIM JAEWON, Nikkei
The South Korean Ministry of Justice is considering imposing a total ban on trading in bitcoin, other cryptocurrencies and digital tokens in order to protect individuals from potential scams, a ministry official told the Nikkei Asian Review on Dec. 11. While the finance ministry and some legislators are likely to oppose the justice ministry’s move, the discussion itself reflects a growing trend among Asian governments towards tighter controls on the use of cryptocurrencies.
https://goo.gl/1YiFyJ

South Korea finance minister says in talks with ministries on regulation of bitcoin trading
Reuters Staff
South Korea’s finance minister said on Monday that relevant ministries are in talks to decide whether trading of bitcoins should be regulated.
https://goo.gl/riQrqV

N Korea criticises planned naval blockade as ‘declaration of war’; US, S Korea and Japan hold joint two-day missile tracking drills
Bryan Harris in Seoul – FT
North Korea has criticised a proposed US naval blockade, saying such a move would constitute another “declaration of war”.
https://goo.gl/fhpfDp

Philippines

BSP bolsters Philippines’s investment-friendly climate
By Manny B. Villar – Business Mirror
Profit is the primary factor that drives investors to take their capital to a certain country. Aside from opportunities to generate income, investors also look at a host country’s financial system, which is important particularly for corporations that operate in different countries.
https://goo.gl/9mZjdc

Philippines gets Fitch upgrade; investors shrug off drug war
By Lawrence Agcaoili – The Philippine Star
MANILA, Philippines — The brutal drug war has not shaken investor confidence and macroeconomic fundamentals remain strong, prompting international debt watcher Fitch Ratings to upgrade the Philippines’ credit rating yesterday.
https://goo.gl/1t8obL

Bangladesh minister: We want to ‘wipe out’ Philippines bank after $80 million heist; The finance minister said he wants to “wipe out Rizal Bank from Earth” due to the cyberattack.
Charlie Osborne – ZDNet.com
Bangladesh’s finance minister has said he wants to “wipe out” the Philippines bank linked to a cyberattack that left the country’s central bank $81 million out of pocket.
https://goo.gl/bZRKkL

Malaysia

Local currency settlement framework launched; 7 Malaysian banks appointed
NST
Cross-border settlements using local currencies to settle trade and direct investments have taken shape and will strengthen further on the back of strong intra-Asean trade said Bank Negara Malaysia governor Tan Sri Muhammad Ibrahim.
https://goo.gl/svr5QW

India

India counters US stand over special treatment to developing nations
Financial Express
Addressing the plenary session at the 11th ministerial conference of the WTO, Commerce and Industry Minister Suresh Prabhu observed that many developed countries have benefited under the GATT rules in agriculture and textiles.
https://goo.gl/uP5pgE

Russia, China support India’s aspiration for greater role in UN
Economic Times
The foreign ministers of China and Russia reiterated the importance they attach to the status of India in international affairs and support its aspiration to play a greater role in the United Nations, at the 15th Russia-India-China (RIC) trilateral meet here, on Monday.
https://goo.gl/QvfLSN

How families in India are filling the gaps in dementia care; Burden falls on loved ones in country where few patients receive diagnosis or treatment
Amy Kazmin in Kolkata – FT
Julie Banerjee Mehta, an Indian academic based in Canada, was hurled into the world of Alzheimer’s disease in a single, savage moment 10 years ago.
https://goo.gl/7ZHMYe

Only 29% female Internet users in India: UNICEF report
Financial Express
The digital gender gap also leads to the inability to access online services and information on issues related to women health or further their education and skills that could help them participate in the global economy of the 21st century.
https://goo.gl/de1VYY

Australia

Australia’s Financial Watchdog Will Monitor Bitcoin Exchanges
Samburaj Das – Crytocoinnews.com
AUSTRAC, Australia’s financial intelligence and watchdog, will now monitor bitcoin exchanges following newly passed legislation.
https://goo.gl/CDymg6

Google, tech firms at odds with content creators over Australian copyright safe harbour ruling
by Max Mason – Fiancial Review
Google and members of Australia’s technology sector have urged the government to reconsider excluding them from changes to safe harbour, while the content sector has applauded the decision to not extend the copyright provisions to digital commercial entities.
https://goo.gl/fWyFJi

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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 MarketsWiki.com, MarketsReformWiki.com, MarketsWikiEducation.com, JohnLothianNews.com and three industry newsletters.