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Asia Pacific Financial News from John Lothian News – December 13, 2017

Lead Stories

Deutsche Bank Says ‘Mrs. Watanabe’ Behind the Surge in Bitcoin
By Julie Verhage – Bloomberg
Japanese retail investors seen shifting from currency trading; Men actually hold the majority of Japanese trading accounts
That term is often used to describe the individual Japanese investor, traditionally a housewife who runs her family’s finances. And that’s who behind the surge in bitcoin, according to a Deutsche Bank AG note Thursday.
https://goo.gl/6AgXNz

All Chinese Oil Traders Want for Christmas Is a Futures Contract
Bloomberg News
Speculation growing that domestic contract will be listed soon; Chinese commodities trading has slowed this year, data shows
Unlike Mariah Carey, all Yuan Quwei wants for Christmas is to trade oil futures on a Chinese exchange. She’s among the mass of speculators that have pumped trillions of yuan into the country’s fledgling commodities bourses, trading in everything from eggs to iron ore futures with extraordinary intensity. She’s now waiting for the launch of China’s long-delayed domestic crude contracts, and hoping it’ll be in time for Christmas.
https://goo.gl/bJqFMT

China Still Fears the Fed
By Nathaniel Taplin – WSJ
China’s central bank, arguably now the world’s second most powerful, always presents a placid exterior to the world. That doesn’t mean that underneath, like the proverbial duck, it isn’t paddling madly to stay afloat.
https://goo.gl/CLUWnZ

Japan bosses face life-and-death struggle; Failure to hire new blood dooms companies to decline
Robin Harding in Tokyo – FT
Every year, Mitsuhiro Wada has to recruit up to 900 new graduates in a country with an ultra-low unemployment rate of 2.8 per cent and a declining pool of young people at university.
https://goo.gl/adSGJ4

Central Asia Yet to Adjust to Cheaper Oil: World Bank
By Olzhas Auyezov – Reuters
Countries across energy-rich Central Asia are a long way from readjusting to lower oil prices and will need to carry out large-scale reforms to regain competitiveness, a senior World Bank economist told Reuters in an interview.
https://goo.gl/auNWYC

HNA hails meeting with Chinese banks as ‘signal of support’; Airlines-to-financing group acts quickly to squelch chatter lenders were reviewing credit lines
Don Weinland in Hong Kong and Lucy Hornby in Beijing – FT
Chinese airlines-to-financing conglomerate HNA has met with banks at its headquarters in southern China to discuss lending in 2018, the company said, in what it described as a show of support.
https://goo.gl/w8urQ2

Exchange News

HKEX’s annual RMB FIC Conference is set for 12 June 2018 at the Grand Hyatt #HK. We are now inviting sponsors to support the event. Here are the packages:
https://goo.gl/VgaFcd

FinTech News

China’s Tech Startup Funding: The Wild West in the Far East; Over-the-top valuations, intense competition and greater uncertainty on returns have some talking of bubbles
By Li Yuan – WSJ
David Su was one of China’s first venture capitalists. A month after starting out in 2000, the dot-com bubble burst. For much of the year, he and his partners scraped to raise $33 million to invest in China’s nascent internet industry.
https://goo.gl/Jk7xvS

Google’s AI overture to China; Facebook’s 97-cent Brexit ads, Toshiba buys time, French school smartphone ban
Richard Waters in San Francisco – FT
As Google looks to get a stronger foothold in China, who better to take a leading role than Fei-Fei Li? The Stanford University AI professor and part-time Googler came to the US from China at the age of 16. She will now soon be helping to manage a small AI research team that Google plans to recruit in Beijing.
https://goo.gl/TNzeU7

Regulatory News

Investigation into the Macro Group leads ASIC to cancel the licence of Anquan Securities & Investments
ASIC
ASIC has cancelled the Australian financial services (AFS) licence of West Australia-based Anquan Securities & Investments Pty Ltd (Anquan) as it was unable to comply with its licence conditions.
https://goo.gl/4uhxYC

Interactive Brokers LLC pays $250,000 infringement notice penalty
ASIC
Interactive Brokers LLC (‘Interactive’) has paid a penalty of $250,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (‘the MDP’).
https://goo.gl/Yh1u1B

ASIC permanently bans Melbourne couple for contravening an ASIC banning order and engaging in misleading and deceptive conduct
ASIC
ASIC has permanently banned husband and wife, Shrikrishna and Shilpa Karandikar, from engaging in credit activities.
https://goo.gl/Ms68zj

Banking watchdog moves to open up industry to foreign capital; Commission eyes cancelling waiting period to operate RMB business and supporting branches with regard to government bonds
By ASIA TIMES
The China Banking Regulatory Commission said it will continue to facilitate the opening of the domestic banking industry and support foreign capital as it engages in China’s financial market more extensively, according to an announcement posted on its official website on Wednesday.
https://goo.gl/qYjnJe

South Korea joins in Asia-wide bitcoin crackdown; Cryptocurrencies receive the cold shoulder as security fears come to the fore
KIM JAEWON, Nikkei
The value of the virtual currency Bitcoin grew more than 16-fold in 2017. © Reuters
SEOUL The South Korean Ministry of Justice is considering 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.
https://goo.gl/eAzjR6

Investing News

Why cautious parents help drive Japan’s stock market; Japanese companies don’t IPO just to raise money — the prestige helps attract talent
Leo Lewis – FT
On Wednesday, after holding out for 52 years as a private company, the parent of Japan’s second-largest parcel delivery company, Sagawa, took the plunge and listed on the Tokyo Stock Exchange. It was the biggest IPO of 2017, the shares began a 33 per cent surge from the outset and, by Thursday’s close, the company was worth nearly ¥700bn.
https://goo.gl/RbGph9

China Just Posted a Record Surge in Inward Foreign Investment
Bloomberg News
A slew of new businesses setting up shop in China drove a 91 percent jump in foreign direct investment last month, the biggest increase in data going back two years.
https://goo.gl/wFMW7s

Japan

Japan Public Sees ‘No Point’ Fleeing From North Korea Missiles
By Isabel Reynolds – Bloomberg
Only 6% sought shelter following September 15 missile launch; Around 60% said they didn’t feel fear after news of the launch
Few Japanese followed official warnings to take shelter following the launch of North Korean ballistic missiles in August and September, according to a Japanese government survey.
https://goo.gl/YNCrER

Tokyo may be too late to the financial hub party
BY WILLIAM PESEK – Japan Times
Gov. Yuriko Koike may be taking Tokyo’s “London of the East” dream a bit too literally, inking a four-year partnership agreement with the British capital.
https://goo.gl/WxFdjy

As Bitcoin’s Value Rises, Japanese Investors Join In
LearningEnglish.voanews.com
A lot of individual Japanese investors own government securities and other traditional investments, like shares of stock.
https://goo.gl/VfndPz

Here’s who may be behind bitcoin’s wild surge: Japanese men; Deutsche Bank’s Masao Muraki notes that, for the most part, retail investors in leveraged FX trading fail to meet their profit goals, thus shifting their focus to “leveraged cryptocurrency trading.”; Cryptocurrencies, especially bitcoin, have been on fire this year.; Muraki also said that “speculation in cryptocurrency is growing to a scale that cannot be ignored.”
Fred Imbert – CNBC
Japanese men may be the driving force of bitcoin’s wild surge, a strategist at Deutsche Bank said Thursday.
https://goo.gl/zLTJtJ

One group of traders has risen to dominate bitcoin trading
Akin Oyedele – Business Insider
Japanese men in their 30s and 40s are the biggest drivers of the bitcoin boom.
https://goo.gl/CRTVHZ

Mainland China

Robots Multiply in China With Annual Output Passing 100,000
Bloomberg News
China is churning out robots. Annual production of industrial robots surpassed 100,000 for the first time — and it only took 10 months. Shipments were up 67 percent through October compared with a year earlier, state media reported Thursday. And there’s more to come: full-year output will reach 120,000 units, according to Ministry of Industry and Information Technology forecasts.
https://goo.gl/zP9HgY

Venezuela quickly resolves financial dispute with China
The Associated Press
Venezuela’s cash-strapped government has quickly settled a lawsuit filed by a state-run Chinese company, making good on an unpaid bill and appeasing an important ally that holds billions in the South American country’s debt.
https://goo.gl/zLTCgV

China raises market rates to fend off financial risks, growth cools
Kevin Yao, Winni Zhou – Reuters
China’s central bank on Thursday nudged up money market rates as authorities sought to defuse financial risks without imperilling the economy, a balancing act that they have managed successfully so far this year as activity remained broadly steady.
https://goo.gl/mCauSG

Why Europe need not kowtow to China; With a modicum of confidence, EU nations can set the terms of the relationship
Philip Stephens – FT
It is a commonplace in Chinese commentary that Europe is in irreversible decline. Hope, you suspect, is welded to expectation. Democracies, the story goes, are in trouble as the old economic powers are left behind. China is stealing a technological march. As the US turns inward, an enfeebled Europe will have to turn eastward. China’s grand “one belt, one road” project will connect east to west, new to old. Guess who will be in charge?
https://goo.gl/JgsSEN

China’s pollution curbs hit growth as policy priorities shift; Industrial output dips after thousands of factories and mines are closed
Gabriel Wildau in Shanghai – FT
China’s manufacturing sector slowed last month as strict measures to curb winter pollution forced factories to cut production, the latest sign of policymakers’ increasing willingness to sacrifice economic growth in favour of other priorities.
https://goo.gl/V6Sd8f

Wanda Denies It’s Facing Cash Crunch After Chinese Blog Post
Bloomberg News
Group says it has more than $30 billion in its cash accounts; Conglomerate says it reported blogger to Chinese police
Dalian Wanda Group Co. denied allegations by a Chinese blogger that the conglomerate was facing a cash crunch and that its assets had shrunk by more than half.
https://goo.gl/GygUGY

Latin America Needs a China Strategy; Because China definitely has a Latin America strategy.
By Mac Margolis – Bloomberg
To judge by the pomp and shuttle diplomacy, Latin America and China are best of friends. Witness the bonhomie in Punta del Este, where delegates from 33 nations in the Americas just rolled out the red carpet for authorities from Beijing and scores of corporate bigwigs at a business summit — one of many parleys celebrating what Uruguayan President Tabare Vazquez hailed as “the new normal China,” and his region’s chance to engage with a “champion of world trade and engine of global commerce.”
https://goo.gl/YVT1Lw

Hong Kong

Carrie Lam inks deal setting out Hong Kong’s role in Beijing’s global development plan
South China Morning Post
Agreement will help city utilise its ‘unique edge’, boost competitiveness and explore ‘new room for developments’
https://goo.gl/tiy76x

Singapore

Singapore to start futures trading on Indian stocks; Move could lead to further export of domestic financial markets
Pavan Burugula – Business Standard
In what could be a major blow to the domestic derivatives market, the Singapore Stock Exchange (SGX) will soon launch trading in Indian single-stock futures on its platform. The Singapore bourse currently offers trading in Nifty index contracts, which are very popular among overseas investors.
https://goo.gl/rc8sT2

Credit Suisse Takes a Stake in Singapore Fintech
Finews.Asia
Swiss bank Credit Suisse ramped up its fintech prowess with a 10 percent stake in a Singapore-based data aggregation platform for the wealthy.
https://goo.gl/Zybn88

Hong Kong Vs. Singapore: Battle Of Two Asian Tigers
Poppy Skinner – Bllnr.sg
Hong Kong Vs. Singapore: Battle Of Two Asian Tigers. Which Asian Tiger has a stronger economy and stock market?
https://goo.gl/kpabdX

Vietnam

Fintechs flock to Vietnam, but cash is still ‘King’
Vietnamnet
VietNamNet Bridge – Analysts believe it is not by chance that Samsung, Ant Financial Services and Facebook joined the Vietnamese fintech market this year.
https://goo.gl/73igrW

Vietnam’s nascent debt markets set for bigger deals; Longer dated debt would be of particular benefit to nation’s banks
Laura Noonan – FT
Vietnam has already been the standout beneficiary of the Asian Development Bank’s efforts to stimulate South East Asian fixed income markets — and the country’s progress is set for another boost as bankers work on longer-term debt, project bonds and other innovations for next year.
https://goo.gl/TXy23c

The World Bank and Vietnam Work to Strengthen Financial Systems; New report outlines guidance for corporate financial reporting and auditing
Military-Technologies.net
A new World Bank report, jointly launched today with Vietnam’s Ministry of Finance, will support the development of a sound financial reporting institutional framework, by improving understanding of high-quality corporate financial reporting and auditing.
https://goo.gl/yT3k3s

Vietnamese Women Crack the Corporate Glass Ceiling; A quarter of CEOs and board directors in Vietnam are women
By Krystal Chia – Bloomberg
Vietnam is a bright spot for gender diversity in Southeast Asia, with a recent report showing the country has a higher representation of women serving as board directors and chief executive officers than Malaysia, Singapore and Indonesia.
https://goo.gl/BL9eJY

Thailand

Local Currency Settlement Framework Indonesia, Malaysia & Thailand
Indonesia-Investments.com
Earlier this week, the central banks of Indonesia (Bank Indonesia), Malaysia (Bank Negara Malaysia), Thailand (Bank of Thailand) jointly announced the launch of the local currency settlement framework. This framework aims at boosting the use of local currencies in transactions (specifically related to trade and investment) conducted between Indonesia, Malaysia and Thailand in an effort to reduce these countries’ dependence on the US dollar.
https://goo.gl/f66JQJ

South Korea

South Korea’s Toss eyes Southeast Asia financial services market in 2018
By Fintech Innovation
Viva Republica reports that Toss, its locally developed P2P money transfer app, has racked up US$12 billion in transactions in 2017. The startup also reports that as of November 2017 they are processing over US$1 billion per month in P2P payments via Toss. It also reports that to date over 12 million Koreans have downloaded the app.
https://goo.gl/YV2htT

Bitcoin Gets High in Korea
By Tim Culpan – Bloomberg
If you can’t beat them, regulate them.That sounds like a pretty good mantra for governments the world over trying to wrap their heads around this tamagotchi of finance better known as bitcoin.
https://goo.gl/hq9RjF

Philippines

Palace: Gov’t work suspended on December 26, January 2
By Rosette Adel – Philstar
Malacañang on Thursday announced the suspension of government work nationwide on Dec. 26, 2017 and Jan. 2, 2018 in observance of the Christmas and New Year holidays.
https://goo.gl/i6WhqS

Philippine Central Bank ‘Reviewing’ 12 Bitcoin Exchange Applications
Samburaj Das – Cryptocoinsnews.com
The Philippine central bank is reportedly reviewing 12 applications for bitcoin exchange registrations.
https://goo.gl/aJV9t4

Malaysia

Malaysia issues draft regulations for crypto currency businesses
Reuters Staff
Malaysia’s central bank on Thursday said it had issued draft regulations for digital currency businesses, but said that such currencies were still not legal tender in the country.
https://goo.gl/VepQsA

No signs of another regional financial crisis but challenges exist: World Bank expert
V. Ragananthini – Thesundaily.my
wenty years down the road since the 1997 Asian Financial Crisis, there are no tell-tale signs of another regional crisis looming.
https://goo.gl/rnhoF7

RAM Ratings: Malaysia well poised as green finance hub
The Borneo Post
RAM Ratings sees Malaysia gaining traction as a green finance hub, driven by its well-established sustainable financing system.
https://goo.gl/4bjc8d

Bank Negara says no move to regulate digital currencies, you invest at your own risk
Posted on 14 December 2017 – 11:17pm
Last updated on 15 December 2017 – 12:11am
Lee Weng Khuen and V. Ragananthini – TheSunDaily.com
Bank Negara Malaysia (BNM) said yesterday its move to impose reporting obligations on digital currency exchanges is not a move to regulate digital currencies and that investors are going into the market at their own risk.
https://goo.gl/9WgmJY

India

Government exploring opportunities to make India USD 1 trillion economy
Financial Express
The government will explore new opportunities in various sectors like providing BPO service from home, digital healthcare and agriculture to achieve the target of making the country a USD 1 trillion economy.
https://goo.gl/PEH1cN

FRDI Bill: What SBI Report Says About New Bill; The FRDI bill will be a win-win for all, the SBI Ecowrap report said.
NDTV Profit Team
The proposed Financial Resolution and Deposit Insurance (FRDI) Bill has generated a lot of noise with bankers threatening to go on strike if the Center proceeds on the proposed legislation. Presently under consideration of the Joint Committee of Parliament, the FRDI bill aims to create a framework for overseeing financial institutions such as banks, insurance companies, non-banking financial services (NBFC) companies and stock exchanges in case of insolvency. The bill was first introduced in the Lok Sabha in August this year.
https://goo.gl/3nvctL

India Probes Unregulated Bitcoin Exchanges After Valuations Jump
By Iain Marlow – Bloomberg
Official declines to give details citing ‘ongoing operations’; Government panel set up to decide stance on cryptocurrency
India’s income tax officials are investigating transactions at various illegal bitcoin exchanges, a week after the country’s central bank cautioned users of the virtual currency about potential risks.
https://goo.gl/vLyZ5t

Australia

Commonwealth Bank blames system error on law breach
AFP
Australia’s biggest bank, the Commonwealth, has admitted more than 50,000 breaches of anti-money laundering laws, but said it will defend a host of others claims brought against it.
https://goo.gl/amTS3M

Australian bank faces more charges from financial watchdog
By ROD MCGUIRK, ASSOCIATED PRESS
Australia’s financial crime intelligence agency on Thursday widened its allegations against the country’s largest bank, the Commonwealth Bank of Australia, of failing to comply with measures to prevent money laundering and terrorism financing.
https://goo.gl/PvZqyA

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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.