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Asia Pacific Financial News from John Lothian News – December 20, 2017

Lead Stories

Is Asia driving the Bitcoin craze?
Karishma Vaswani – BBC
But this, says Dexter Ng, is the workshop of the future. A self-professed cryptocurrency entrepreneur, he’s the chief technology officer of SG Mining – a business making and selling rigs. These are the powerful computers that solve complex mathematical problems in a process that earns their owners digital currencies such as Bitcoin.
https://goo.gl/AaJZKt

Smarter weapons needed to fight savvy financial criminals; With money laundering the fourth most common financial crime in Singapore, we need to step up collaboration
DIVYA KHANGAROT – TNP
Money laundering has existed for as long as we have had money. Today, it is estimated that money laundering around the world reaches between US$1 trillion (S$1.35 trillion) to US$2 trillion, around 2 per cent to 5 per cent of global gross domestic product. While many are not directly exposed to the effects of money laundering, the impact in social and economic terms is staggering.
https://goo.gl/DEEhMh

Breakingviews – Bitcoin finds unlikely ally in Asian watchdogs
Robyn Mak – Reuters
Bitcoin has found unlikely allies in Asia: regulators. Japan and South Korea now make up some half of global trading in the $300 billion market. Tokyo has officially recognised bitcoin and crypto-currency exchanges, and Seoul is mulling the same. Such regulation is an effort to contain risk but also encourages acceptance and increases the allure of this untouchable cash.
https://goo.gl/1MM9ii

North Korea’s strategy is to ease out of China’s patronage; Pyongyang aims to monetise its nuclear threat to seek engagement with US
By Peter S Kim – FT
Since President Donald Trump was sworn into office, the perception of risk surrounding North Korea has risen to levels not seen for over a decade.
https://goo.gl/CY2VRg

There’s a Flip Side to Asia’s Dollar Bond Boom
By Denise Wee – Bloomberg
Low liquidity, lack of CDS has limited opportunity for shorts; Rising volume of bonds to lend for repo may boost volatility
Asian companies are turning to the dollar bond market like never before, selling record amounts of securities that leveraged investors desperate for yield are scooping up. But there’s a flip side to all that growth: it’s getting easier for funds to sell them short.
https://goo.gl/XokNz8

Nomura Suspends Two Junk-Bond Traders in London
By Tom Beardsworth , Stefania Spezzati , Donal Griffin , and Alastair Marsh – Bloomberg
Bank is said to suspend Jeremy Gosling and Shaun Barlow; Some traders are said to have been informed on suspensions
Nomura Holdings Inc. suspended a London-based trader and his boss, according to people with knowledge of the matter.
https://goo.gl/U7Ndi7

Exchange News

HKEX PUBLISHES 2017 MARKET STATISTICS
HKEX
2017 has been an active and vibrant year for Hong Kong’s securities and derivatives markets, according to market statistics from 1 January to 15 December 2017, published on Hong Kong Exchanges and Clearing Limited’s (HKEX) website today in response to media requests.
https://goo.gl/vCfDsF

Investing News

Carson Block Bets That a Nasdaq-Listed Chinese Internet Stock Is a ‘Fraud’
By Annie Massa and Erik Schatzker – Bloomberg
He’s short selling China Internet Nationwide Financial; The stock has tripled in price since the company’s July IPO
“This thing is a complete fraud, a total zero,” Block tells Bloomberg’s Erik Schatzker.
Prominent short seller Carson Block said he’s now targeting China Internet Nationwide Financial Services Inc., a Nasdaq-listed stock that went public in July.
https://goo.gl/AibDeg

N.Z. Tech Stock Up 3,000% Is Jumping Ship for Sydney Exchange
By Moxy Ying – Bloomberg
Dual-listed Xero Ltd. to stop trading in New Zealand; On track to be added to Australian benchmark: Morgan Stanley
New Zealand’s stock market has become too small for Xero Ltd., whose market value has soared about 70-fold to NZ$4.28 billion ($2.98 billion) since its debut a decade ago.
https://goo.gl/wWjFSc

Never Mind Bitcoin. China Loves AI Stocks; Investors look past spotty earnings and see the government’s blessing.
By Jeanny Yu and Cindy Wang – Bloomberg
Iflytek Co., a Chinese developer of speech-recognition software, has consistently failed to meet analysts’ profit estimates. And yet it’s one of the hottest stocks in China, gaining 117 percent this year as of Dec. 18, thanks to the latest investment craze sweeping the country’s $7.5 trillion equity market: artificial intelligence.
https://goo.gl/QczE59

Japan

Japan’s private financial assets hit record 3 quadrillion yen; 40% sitting in banks and 1 quadrillion yen invested abroad
Nikkei
While private-sector financial assets reached a record 3 quadrillion yen ($26.4 trillion) or so as of the end of September, a large portion of the wealth has not been tapped to help boost economic growth, a report released Wednesday by the Bank of Japan shows.
https://goo.gl/2jK4Yk

Japan’s Bounce Is a Parable of These Economic Times; The central bank is easing off stimulus, as confidence and exports rise and companies begin to spend.
By Daniel Moss – Bloomberg
In a year of economic surprises, mostly good ones, Japan is right up there.
https://goo.gl/ob4VZT

Japan’s new rules on high-frequency trade set for April; Exchange operator and government watchdog both keeping a closer eye
Nikkei
The Japan Exchange Group will impose new rules on high-frequency trading in April to make the market more transparent, as well as to reduce price volatility and prevent market manipulation.
https://goo.gl/uz7NJv

Why the North Korea Threat Isn’t Pushing Japan to Go Nuclear
By Isabel Reynolds and Emi Nobuhiro – Bloomberg
Children learn about Hiroshima suffering from early age; Some Japanese lawmakers have sought debate on nuclear weapons
A glance at Japan’s elementary school textbooks shows why the only nation hit by nuclear bombs is unlikely to embrace them despite the growing threat from North Korea.
https://goo.gl/Xt2jsD

Mainland China

Chinese leaders promise more imports, less financial risk
By The Associated Press
Chinese leaders promised Wednesday to increase imports and reduce risks in their financial system amid slowing economic growth and pressure from Washington and Europe to open their markets wider.
https://goo.gl/41FpSU

China set to allow Japanese companies to issue panda bonds; Mitsubishi UFJ and Mizuho Bank are awaiting approval, as bilateral relations warm
ISSAKU HARADA, Nikkei Japanese and Chinese authorities are set to agree on creating a framework to exchange auditing information on Friday, a major step toward allowing Japanese companies to issue yuan-denominated bonds in China.
https://goo.gl/KAbuh4

China Will Tighten U.S. Soybean Export Standards, USDA Says
Bloomberg News
Cargoes to be labeled for foreign-matter content over 1%; Shipments above new limit may be held back for more cleaning
U.S. officials will impose stricter quality controls on exports of soybeans headed to China in response to a request from the government in Beijing, a move that may curb some American shipments.
https://goo.gl/nHzYpp

China Turning Screws on Leverage Creates Record Divide in Stocks
By Richard Frost – Bloomberg
Largest stocks outperform in 2017 as most of market falls; Kweichow Moutai, Ping An Insurance head for steep annual gains
China’s campaign to cut risk in the financial sector this year has helped make the nation’s stock market the most divided on record.
https://goo.gl/kYuFE7

Indonesia

Indonesian Central Bank Regulates Financial Technology
Lexology
Indonesia’s central bank has for the first time issued a regulation designed to deal with financial technology (“fintech”) in general. Bank Indonesia (“BI”) Regulation Number 19/12/PBI/2017 regarding the Provision of Financial Technology, dated November 30, 2017 (“Reg. 19/2017”), was made public by BI on December 7. The stated aim of Reg. 19/2017 is to regulate the implementation of fintech to foster innovation, ensure consumer protection, and manage risk in order to maintain monetary and financial system stability, and an efficient, safe and reliable payment system.
https://goo.gl/RbBmNZ

Singapore

Singapore firms anticipate moderate hiringHomeNews
by Paolo Taruc – HRD
Singapore can expect moderate hiring activity among employers for the first three months of 2018, according to data from HR consulting firm ManpowerGroup.
https://goo.gl/XEBF6r

Vietnam

Vietnam police probe oil executive in widened crackdown
The Associated Press
Vietnamese police have officially started investigating a former chief executive of state-owned energy giant PetroVietnam amid a widened crackdown on corruption.
https://goo.gl/D21fBq

Thailand

Chinese Tourists Could Cause Years of Misery for Thai Airports
By Natnicha Chuwiruch – Bloomberg
Airport, rail expansions will take years to ease congestion; Meanwhile visitor numbers are projected to almost double
Thailand, land of golden temples, white-sand beaches, smiling hosts. Or of overcrowded airports, epic traffic jams and littered seashores.
https://goo.gl/bMbe7B

BoT chief not sold on bitcoin
JARUPUN JIRARUTCHANIROM & SOMRUEDI BANCHONGDUANG – Bangkok Post
Bank of Thailand governor Veerathai Santiprabhob raised the warning flag on cryptocurrencies, saying they are not legal tender, although regulation is not needed as only a handful of people use them.
https://goo.gl/i8vFeP

Taiwan

Taiwan’s Central Banker Leaves Legacy of Stability, Sharp Elbows
By Justina Lee and Argin Chang – Bloomberg
Perng Fai-nan known for tight grip over currency, commentary; Taiwan seeks to appoint first new chief policymaker since 1998
When Perng Fai-nan took over as Taiwan’s central bank governor, one share in Apple Inc. cost less than 80 cents, China’s economy was smaller than Italy’s and the Asian financial crisis was in full force.
https://goo.gl/DVvdhY

South Korea

CEO Says Beware of North Korean Hackers ‘Building a Cache of Bitcoin’
By SARAH GRAY – Fortune
Companies that deal in bitcoins and other digital currencies should be worried about being hacked by North Korea, which is “building a cache” of stolen crypto-loot, says one cybersecurity CEO.
https://goo.gl/pWpw8q

India

The Indian wedding that bet on Bitcoin
By Imran Qureshi – BBC Hindi, Bangalore
When Prashant Sharma and Niti Shree were planning to marry, they decided to ask for something unusual as a wedding present – the cryptocurrency, Bitcoin.
https://goo.gl/iGTucL

Why India shouldn’t use the ordinary depositor’s money to rescue banks
Charan Singh – Quartz India
The depositors of India’s commercial banks are worried about the Financial Resolution and Deposit Insurance Bill (FRDI), 2017, which was tabled in Parliament in the last monsoon session and was expected to come up for discussion during the current winter session. Even though the bill has been deferred for now and should come up for hearing next year, concerns remain.
https://goo.gl/KHoqCx

Alternative assets industry in India worth $43 billion, says Report
Financial Express
The alternative assets industry in India is worth $43 billion across private equity, venture capital, real estate, infrastructure, private debt and hedge funds, says a report.
https://goo.gl/U8i8i9

RBI places restrictions on Bank of India after bad loan spike
By Sangita Mehta, ET
Shares of Bank of India fell 5% soon after the Reserve Bank of India (RBI) has imposed certain restrictions on Bank of India carrying out banking activities as its share of bad loans rose sharply.
https://goo.gl/pnAzAq

Australia

Steinhoff scandal expected to trigger asset sales in Australia
by Sue Mitchell – AFR
Steinhoff International’s $1 billion Australian business could be split up and sold off if banks owed €10.7 billion ($16 billion) ignore the company’s pleas for support and pull the plug.
https://goo.gl/oEaB5e

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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.