ECB gives off mixed signals | Will ECB bond buying hit a limit? | EU signals harsh blow to London finance if UK exits single market
September 9, 2016
CFA Institute: Financial NewsBrief - Asia Pacific Edition
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Is China's debt worthy of alarm?
China's tremendous debt load, which stems largely from corporate borrowing, is raising alarms among many observers, including George Soros. Some early evidence supports those fears, but the situation may be not be as dire as it appears due to the mitigating effects of China's high savings rate and the fact that much of the debt is ultimately backed by the government.
The New York Times (free-article access for SmartBrief readers) (9/7) 
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ECB gives off mixed signals
The European Central Bank fell short of market expectations Thursday and said only that it would study an extension of its stimulus program, delivering a more balanced message than anticipated. But the bank also lowered some of its forecasts for the eurozone economy, suggesting that additional measures may be inevitable, though not immediate.
Reuters (9/8) 
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Will ECB bond buying hit a limit?
If the European Central Bank eventually elects to extend its bond-buying program beyond March, the question then becomes what, exactly, will be left to buy.
Financial Times (tiered subscription model) (9/8) 
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EU signals harsh blow to London finance if UK exits single market
The UK's decision to leave not only the EU but also the single market will inevitably deal a severe blow to London's financial industry, European Commissioner Valdis Dombrovskis said. The industry's full passport access to Europe would be forfeited, Dombrovskis said, if the UK elected to restrict labor access to its market, a key factor in Britons' vote in favor of Brexit.
The Business Times (Singapore) (free content)/Agence France-Presse (9/8) 
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Brexit seen taking a big bite out of German growth in 2017
Germany's foreign trade and the broader economy will suffer, with growth next year falling by nearly half as Brexit's effect begins to be felt, according to a forecast by the DIW institute. Growth in 2017 is projected at 1%, down from an expected 1.9% this year, with Brexit alone knocking 0.3 percentage point off the 2017 figure.
Reuters (9/8) 
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Market Activities
International Markets Overview
Regulatory Update
2nd Australian bank refunds fees amid scrutiny
Amid suspicions of excessive market power and misconduct, Australia's Westpac Banking refunded A$20 million to 800,000 customers over fees that may not have been justified. Westpac followed a similar move by Australia and New Zealand Banking Group, with both actions prompted by calls for a review of the banks' conduct.
The Business Times (Singapore) (free content)/Reuters (9/8) 
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Taiwan weighs callable-bond protection for insurers
Taiwan's insurers would be afforded some protection from the danger posed by early repayment of callable bonds under policies being considered by the Financial Supervisory Commission. The proposal was prompted by a recent spate of such repayments by foreign issuers looking to take advantage of lower financing costs, posing a challenge for insurers' investment planning.
The Taipei Times (Taiwan)/Bloomberg (9/9) 
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Lack of high-level cyberexpertise cited at India's banks
Oversight at the board and executive level at India's banks may be lacking on the subject of cybersecurity, according to the central bank. "With strides in technology, it would be difficult for boards that do not have members having expertise in technology-related areas to effectively adopt technology" to thwart cyberthreats, central bank Deputy Governor S.S. Mundra said.
The Hindu (India) (9/8) 
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Economic Trends & Outlook
China's exports, imports picked up in August
China posted a 5.9% rise in exports for August, improving on a 2.9% gain the previous month, and imports surged 10.8%, reversing a 5.7% decline in July. The trade data are encouraging in what has generally been luckluster performance amid slack global demand, leaving overall foreign trade down 1.8% for the first eight months of the year from the year-earlier period.
Xinhuanet.com (China) (9/8) 
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Factors seen converging to keep renminbi stable
In light of new commitments to the Group of 20 and the renminbi's imminent inclusion in the International Monetary Fund's basket of Special Drawing Rights currencies, China is unlikely to countenance any significant devaluation for the rest of the year, according to a report by China International Capital. Even after SDR inclusion, CICC predicts, China is likely to favor stability to secure its reputation.
Xinhuanet.com (China) (9/8) 
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Japan's Q2 growth revised upward to 0.7%
Japan's economy grew 0.7% in the quarter that ended in June, an increase from the earlier report of 0.2%.
Xinhuanet.com (China) (9/8) 
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UK group to focus on post-Brexit trade ties with India
The UK is laying the foundation for trade negotiations with India ahead of the UK's formal exit from the EU. A working group will address the issue, although a trade deal cannot be concluded until the UK is fully free of the EU in a process that is expected to take years.
Business Standard (India)/Reuters (9/8) 
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S. Korean Finance Ministry paints bland economic picture
The end of a tax-cut program has cut into domestic consumption, counterbalancing a slight pickup in exports to damp South Korea's economic recovery, according to the Finance Ministry's "Green Book" report. The economy "is facing downside risks at home and abroad, including global financial uncertainties stemming from a possible US rate hike and impact of the ongoing corporate restructuring" at home, the report said.
Yonhap News Agency (South Korea) (subscription required) (9/8) 
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Singapore's leader flags investment worries over South China Sea dispute
Trade and investment across Southeast Asia are bound to be affected by tensions over territorial claims in the South China Sea, Singapore Prime Minister Lee Hsien Loong said. The region's peace and stability -- crucial factors in its recent prosperity -- are at stake, Lee said.
The Business Times (Singapore) (free content) (9/8) 
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Myanmar seeks upgrade from Least Developed Country
Myanmar is pursuing help with technology and other areas to lift itself from its status as a Least Developed Country, legislative sources say. One near-term goal is achieving favorable Generalized Special Preferences, said U Maung Maung Win, the deputy minister of planning and finance.
Xinhuanet.com (China) (9/8) 
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Capital Markets & Financial Products
Japanese bond market flails trying to read BoJ's intentions
The Japanese government bond market is in a rare state of being unable to divine what the Bank of Japan is likely to do at this month's meeting.
Financial Times (tiered subscription model) (9/8) 
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Japanese deal-making expected to heat up after government survey
A government survey of succession planning at hundreds of listed Japanese companies is expected to fuel deal-making in the already active field of private equity deals.
Financial Times (tiered subscription model) (9/8) 
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Indian mutual fund assets reach record 15.6 trillion rupees
Income and equity segments both saw robust inflows in August, lifting the asset base of India's mutual fund industry to a record high of 15.6 trillion rupees in assets under management. General investor enthusiasm was called a factor.
Business Standard (India)/Press Trust of India (9/8) 
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S. Korea's tech-driven market no match for US counterpart
The tech-heavy Nasdaq market in the US has seen healthy gains this year, but not its South Korean counterpart, the Kosdaq, which is down 1.4% so far. The difference lies in the dominance of tech heavyweights in the US market, a presence that's largely lacking on the Kosdaq.
Maeil Business Newspaper (South Korea) (9/8) 
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