Category: Asia

The Bank of America had announced its plans to cut about two dozen investment banking jobs in Asia. Some affected include top dealmakers in the region.

The job cut will coincide with the Goldman Sachs abandonment of several investment banking branches in Southeast Asia that amounts to 30% of its regional business.

Bankers handling coverage and deals would be made redundant this week.

The banks are facing pressure from investors as Hong Kong and other financial hubs are overtaken by Chinese Mainland banks, sweeping away the competition.

The banks have suffered consecutive losses in the last few quarters.

Meanwhile, Bank of America would post information of higher third quarter revenues in its investment banking business.

In July, Chief Executive Officer Brian Moynihan announced a new expense target of $53 billion for 2018, $3.3 billion less than its total expenses over the past four quarters.

The new target came after years of working through a sweeping cost-cutting project dubbed “New BAC” and an ongoing efficiency initiative called “Simplify and Improve.”

Besides Bank of America and Goldman, many western banks have announced plans to scale down their operations in Asia in the past year, as they grapple with slowing revenue growth and higher operating costs in the region.

Several markets in Asia benefit highly from the unchanged interest rates of the US Federal Reserve.

The Australian S&P/AS 200 index had opened up by 0.5% and continued to rise in morning trade, up 0.73% to 5,184.5 points.

And in New Zealand, the benchmark S&P/NZX 50 index spent much of its morning session in positive territory.

The index was later up 0.35% to 6,893.58 points.

Investors there were also given a boost by positive economic growth numbers.

New Zealand posted faster-than-expected growth in the first quarter, up 2.8% from a year earlier.

Stocks in South Korea opened in positive territory but lost some ground later, with the benchmark Kospi index down 0.28% to 1,963.27.

The UK’s impending Brexit vote is what made the US Federal Reserve hold the interest rates for the meantime. According to Chair Janet Yellen, the decision on June 23 by Britons will have economic and financial consequences in the global financial markets.

Despite the hold on interests, it had detrimental effect in Japan and China.

China’s stocks are still in negative territory in early trade. Investors in Japan were waiting news from the Bank of Japan’s meeting, which finishes later. The benchmark Nikkei 225 index was down 1% to 15,756.53 in mid morning trade.

In China, Hong Kong’s Hang Seng index was down 1.18% to 20,226.42, while the Shanghai Composite was down 0.34% to 2,877.29.

An immense social media and communications entity, Facebook has dominated much of the Western market and even Asia.

Line Corporation, however, warns the giant that “Asia is ours”.

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Line Corporation, a Japan-based app company, is using a different strategy despite providing a similar product.

The corporation had used cute bunnies and bears in Japan. In Indonesia, they have used it as a classmate-connecting service based on alumni-based networks, which the company found strong.

According to Line CEO Takeshi Idezawa, the app and their endeavour would be “meaningless unless we have the top share.”

“With regard to services in Asia, I can say that we are at the forefront.”

Idezawa’s company would be battling rival services from WhatsApp, China’s WeChat and Facebook’s gigantic Messenger.

According to App Annie Ltd. Research Head Danielle Levitas, their analytics show that Line is arguably in the best position in Asia.

She said messengers thrive effectively with the plethora of stickers, emojis and other stuff you can do in messenger.

Line’s stickers have gained fame worldwide. Moon, Cony, Brown and other characters now have dolls, stationeries. Life-sized versions of the characters are used as promotional material.

However, it would face stiff competition against WeChat, especially as Line is banned in Japan. The company plans to open three shops in the country despite the ban.

After its Monday sell-off, the Chinese Stock Market continued to tumble on Tuesday. The Shanghai Composite had fallen by 3.11 per cent. However, it retraced back about 0.8 per cent. The Shenzhen Composite opened down by 4.5 per cent. Hong Kong’s Hang Seng Index was down by 0.32 per cent at 21,264.

China had used its new “circuit breakers” linked to the CSI300 index. This would mean a 5 per cent reduction in the CSI300 index would halt trade for 15 minutes. When the index drops by 7 per cent, the market will close for the day.

On Monday, the trade had dipped the CSI300 down by 7 per cent, which suspended the trade for the day. Deutsche Bank estimates that 42 per cent of the 7 per cent loss were mostly financials, property and industrial names.

Circuit breakers are common in both US and China. In the United States, a dip between 7 and 13 per cent against the S&P 500 index halts trading for 15 minutes. If it reaches a 20 per cent mark, it would completely halt trading.

New concerns of a global economic slowdown and increasing tensions in the Middle East reflected on US and European equity markets.

China’s disappointing economic performance in the last three years spawned numerous attempts by investors to pull out of the country. A mix of disappointment against the Chinese government’s management and disastrous years had motivated many to pull out.

However, many saw the returning investors coming out of China and put up their own nets to catch the running investors. Asia’s IPOs and assets show through upcoming deals reviews that they are winning an estimated £11.07 billion out of China’s poor performance and into their IPOs. This was just in the last two months alone.

According to Co-Head of Asia Pacific Equity Capital Markets at Morgan Stanley in Hong Kong Mille Cheng, everything is marketed with the context of slower growth.

Cautionary, Wary Investors

Despite the appealing growth deals coming from China, many investors are still playing safe with their investments. Many analysts have noted obvious risk minimisation.

Investors are also aware of banker cautions about valuations for 2016 staying low even for firms with decent prospects in manufacturing and export trade. This is also due to China’s slowing economy affecting plenty of potential IPOs with its influence.

Along with investors , fund managers continue to choose their investors to ensure profit and improve their respective asset’s price-to-earnings multiples.

About 435 people have died in six Asian countries after heavy monsoon rains and a tropical cyclone had hit parts of Bangladesh and Myanmar. Flooding, landslides, rough seas and double train derailment had caused the increase of the death toll.

The tropical cyclone Komen had hit parts of Bangladesh, Myanmar and India. Extreme rainfall had also added to the cyclone’s destructive strength. At least 166 deaths and some 55,000 houses around the bay of Bengal were wiped out after the rain and the cyclone passed. As the rain evolved into a slow-moving monsoon depression, it had reached Bangladesh. Komen had also picked up tropical storm strength and hit Bangladesh.

The storm and heavy monsoon rains had caused flash floods that Indian authorities said to be the cause of the derailment of two passenger trains on the same bridge near Harda in the central Indian state of Madhra Pradesh last Wednesday.

The Indian National Institute of Disaster Management (NIDM) said that at least 20 people died after a landslide hit the village of Joumol in the Manipur state of northeast India. Flooding, lightning strikes and snakebites have killed 48 lives in West Bengal and Odisha.

About 38,000 houses have been destroyed according to the report and 205,000 structures were damaged in West Bengal alone.

Chinese President Xi Jinping called all to “not spare anything” for the rescue of the passengers of an Eastern Star liner carrying 500 people with 458 passengers aged 60-80 years old.


Rescuers have found 14 to be alive and seven dead. About 27 individuals were able to swim to shore post-sinking of the carrier.

Authorities claim it to be China’s worst maritime disaster in decades.

Footage showed rescue workers tapping the inverted hull of the ship for signs of life before they cut a hole to rescue those who are inside. Divers pulled out a 65-year-old woman from fast-flowing currents around the sunken ship.

Chinese Premier Li Kequiang flew to the site and marshalled a response team of 4000 personally to the site.

Most of the survivors saved themselves. The Tour-Guide leader Zhang Hui grabbed life jackets before they climbed out a window. Zhang floated away as people screamed for help. He remained in water invisible to ships and reached the shore during the morning.

The Eastern Star was to go to Chongqing. After 177-km winds toppled the ship during the heavy storm it encountered, the entire boat capsized.

No foreigners were listed aboard the ship.

Hong Kong protesters watched government and student protest leaders formally discuss the issue surrounding Hong Kong’s upcoming election candidates. The failure of the talks to break a deadlock had many protesters set a schedule for more protest to push for greater democracy in the financial hub.

The Hong Kong protests nearing its first month, has widened the gap between the protesters and the government. The government has labelled the Hong Kong protest activities as illegal. They also went to say the protester’s demands for open nominations were impossible under the laws of the former British colony.

Some protest leaders had called to march to Hong Kong Chief Executive Leung Chun-Ying to protest directly outside his house and ask him to step down. They also thought of expanding their movement to different places to lobby against the government to face and answer their demands.

While Hong Kong has the full right to assume universal suffrage under the “one country, two systems” rule under the Chinese, Beijing is concerned that allowing Hong Kong to have democracy will other groups in mainland China to imitate such demands.

Meanwhile, the protests were rarely violent as protesters were respectful of authorities. Student protesters said they had yet to decide to engage in further talks with the government. Yvonne Leung, one of the student leaders, said that the government did not give a concrete reply and just elaborated on some processes that people do not need to know.

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The South Korean Navy fired warning shots against the North Korean patrol boats that crossed the Yellow Sea boundary or the “Northern Limit Line” at 4PM local time. The line is the maritime border line set by the United Nations after the Korean War. However, North Korea does not recognise it, or refuses to accept it.

According to the South Korean Defense Ministry, the North Korean ships had turned the other way after the naval vessel had fired 10 warning shots.

The NLL had become infamous with many North Korean attacks against the south. Recently, North Korea shelled the waters a few meters away from the border, to which the South responded with equal measure of artillery fire in the same area. In 2010, South Korea speculated that North Korea used a submarine and launched a torpedo that sunk the South Korean ship Cheonan, which had killed 46 sailors.

Defending its borders were two new frigates that were designed to protect against South Korean submarines and protect its water borders. However, due to limited sources, media could not verify whether the frigates are ready for service. The massive size of the frigates had caused alarm for the South Korean Defense Ministry.

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A Chinese department had ordered the deletion of websites in the Great Firewall of China to delete all mention of its low Press Freedom Index Position as reported by the Reporters Without Borders or Reporters Sans Frontieres (RSF). China is currently at the low position of fifth bottom, which is near the ranking of bottom number North Korea.

The Chinese “Ministry of Truth” department had ordered today the deletion of such information from national circulation. The directive coming from the State Council Information Office on Tuesday, reads in direct translation “All websites are kindly asked to delete the article ‘180 Countries Ranked in 2013 Press Freedom Index; China at 175th’ and other related content.”

Because of this, the RSF has put China down two more places because of its actions today, above only North Korea, Turkmenistan, Syria and Somalia. The RSF said that “The daily “directives” to the traditional media from the Department of Propaganda, the constant online censorship, the growing number of arbitrary arrests and the detention of the largest number of journalists and netizens in the world (including 2010 Nobel peace laureate Liu Xiaobo) have made China a model of censorship and repression.”

Other journalists fear that the model imposed by China is now spreading to different parts of Asia, with most Asian countries well-below the PFI.

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