* The Stock Exchange of Hong Kong Ltd. and Hong KongSecurities Clearing Co. Ltd. have formally entered into an with the Shenzhen StockExchange and the China Securities Depository and Clearing Corp. Ltd. toestablish theShenzhen-Hong Kong stock connect program. The formal launch of the trading linkis subject to certain conditions, including obtaining the necessary regulatoryapprovals, said Hong KongExchanges & Clearing Ltd., the operator of the city's bourse.
* PT PaninvestTbk completed the sale of a 53.15% stake in toFairfax Asia Ltd, a unit of Fairfax Financial Holdings Ltd.. for a total considerationof 1.435 trillion Indonesian rupiah. Paninvest said it sold a 51.85% stake inthe general insurer for 1.400 trillion rupiah, while its subsidiary PT PaninGeninholdco sold a 1.30% stake for 35.05 billion rupiah.
* Chinese investors are still seeking property loans inAustralia despite stringent new rules from local banks, which has discouragedforeign real estate clients, The SydneyMorning Herald reported,citing Graham Heunis, HSBC's head of retail banking in Australia.
* WooriBank opened a branch in Shenyang, China, Money Today reported.Woori Bank became a clearing bank for direct trading between the South Korean wonand the Chinese yuan in June.
* CreditSuisse Group AG named Honggui Li as head of China investmentbanking and capital markets, Reuters reported,citing an internal memo. Li was previously associated with .
* Morgan Stanley is optimistic about China's economy andexpects the country's GDP to grow at 6.7% and 6.4% for 2016 and 2017,respectively, compared with previous estimates of 6.4% and 6.2%,Wallstreetcn.com reported.Morgan Stanley said that fiscal support from the Chinese government would bringcyclical growth momentum.
* S&P Global said that rising debt levels would worsenthe credit profiles of China's top 200 companies in 2016, requiring thecountry's banks to raise US$1.7 trillion in capital to cover a possible surgein bad loans, Reuters reported.The rating agency said there is little scope for improvement in 2017 amidworsening leverage and substantial excess capacity in almost all sectors.S&P estimated the problem credit ratio at Chinese banks was 5.6% at the endof 2015 and the ratio could worsen to between 11% and 17%.
* Nearly 100 listed companies invested in more than 50peer-to-peer companies in China, with only three listed companies investing inP2P platforms in the first half, the SecuritiesTimes reported.It is estimated that China's online financial market will reach 17.8 trillionyuan in 2016 and 43 trillion yuan in 2020.
* China's five listed insurers — , China Pacific Insurance (Group) Co. Ltd., Sunline Group,New China Life Insurance Co.Ltd. and China LifeInsurance Co. Ltd. — had 48.64 billion yuan worth of real estateinvestment by the end of June, the 21stCentury Economic Herald reported.China's 18 insurers invested in 196 non-insurer subsidiaries, which are mainlyengaged in real estate, health care, e-commerce, highways, pensions and energy industries.
* China's State Council said it would speed up the improvementof small and medium-sized enterprises' share transfer system, and guide bankdeposits to be transferred to equity investment, in a bid to cut corporateleverage, 927953.com reported. TheState Council also noted that the government will not be responsible for losseswhile corporate leverage processes are being reduced.
* HuataiSecurities Co. Ltd. estimated that the size of China'sloan-for-equity swap program would be between 100 billion and 200 billion yuaneach year, Reuters reported.It noted that the program will help banks release the pressure of nonperformingloans.
* Taiwan's Financial Supervisory Commission said thatexposure to derivatives linked to yuan volatility continued to decline as theChinese currency fell to a new six-year low of 6.7 yuan against the U.S.dollar, the Taipei Times reported.The FSC said that the outstanding notional amount of target redemption forwardwas NT$30.6 billion, down from NT$37 billion at the end of the first quarter.
JAPAN AND KOREA
* The Bank of Japan's inventory of government bonds brokethrough the ¥400 trillion mark for the first time, a figure more than 3× biggerthan when it began quantitative easing, TheAsahi Shimbun reported.
* The Bank of Japan and the Ministry of Finance releasedcyberattack prevention guidelines for financial institutions under a strategyformulated by G7 countries, Tokyo's TheNikkei reported.
* Resona BankLtd. will deploy ATMs compatible with foreign bankcards, targetingmore than 1,000 international ATMs in 2017, TheNikkei reported.The plan also involves leasing such ATMs to regional banks.
* South Korea's Ministry of Strategy and Finance plans toinject 2.7 trillion won into the capital base of Export-Import Bank of Korea for three years from 2018,Yonhap News Agency reported.The bank has so far received a cash injection of 1 trillion won in 2016.
* The average number of daily contactless payments madethrough smartphones in South Korea stood at 810,000 in the second quarter,according to data released by the Bank of Korea, the Maeil Business Newspaper reported.
* KoreaHousing Finance Corp. issued US$500 million of covered bondsoverseas, Yonhap News Agency reported.
* Export-Import Bank of Korea's bad debt exposure toshipbuilders and ocean carriers amounts to 4.1 trillion won, or 76.3% of itstotal nonperforming loan portfolio, Yonhap News Agency reported.
* South Korea's insurance industry is expected to faceslower growth due to factors including slow economic growth, low interest ratesand an aging population, The Korea Heraldreported,citing a report from the Korea Insurance Research Institute. The currentinsurance premium growth rate is 3.2%, which is expected to decrease to 2.2% in2017.
* Permanent Secretary for Finance Somchai Sujjapongse saidhe has not received word from the Bank of Thailand that the country's PromptPay servicewill not be ready to operate by the end of October, Thailand's Krungthep Turakij reported. He saidif the start of the service had to be postponed, it would not affect confidencetowards the system itself.
* Thai Bankers' Association President Predee Daochai saidthe Thai economy should grow by 3.3% in 2016 and 2017 due to public investmentwhile the global economy remains weak, Thailand's Manager Daily reported.He also expected the central bank's monetary policy committee to keep thepolicy interest rate unchanged for the rest of 2016.
* The Office of Insurance Commission of Thailand and theThai Bankers' Association jointly issued guidelines for consumers regardingbancassurance, Krungthep Turakij reported. As of theend of June, premium collections through bancassurance accounted for 45.36% oftotal collection through all channels. However, more than half of complaintsregarding bancassurance were about misunderstood terms.
* Indonesia's Infobankreportedthat nonbank Shariah financial assets grew by 23.18% to reach 80.1 trillionrupiah in July 2016, citing data from the Financial Services Authority.
* Indonesia's Financial Services Authority issued a circularon the capability and appropriateness assessment, also known as the fit andproper test, for candidates seeking to hold senior management positions withinfinancial institutions, Bisnis Indonesiareported.
* Malaysia's Islamic Research & Training Institute saidthe country is fast becoming an example to other countries interested inimplementing an Islamic financial system, Bernama reported.
* Bank Negara Malaysia has intensified its watch on localbanks, according to top bank executives who say that regulatory officers arestationed at some banks to observe their operations for longer periods,Malaysia's The Edge reported.
* The Indian government will likely merge two Mumbai-basedpublic sector banks after the cleanup of bad assets has been completed, as partof efforts to rebuild the country's financial system, Mint reported,citing Vinod Rai, head of the Banks Board Bureau. Rai did not name the banks.
* Indian insurers are submitting benefit-based plans to theInsurance Regulatory and Development Authority of India after the regulatordecided to bar sales of indemnity plans from Oct. 18, Business Standard reported.Currently, indemnity plans take up more than 90% of the insurers' healthportfolios.
* The Indian government released an updated draft of normsunder a new insolvency and bankruptcy code covering the liquidation ofinsolvent corporate persons, Press Trust of India reported.Feedback will be taken from stakeholders before the proposed changes arefinalized.
* Home First Finance Co. India Pvt. Ltd is in talks withMorgan Stanley Pvt. Equity AsiaInc. to raise about 3 billion Indian rupees, Mint reported,citing two people aware of the development.
AUSTRALIA AND NEWZEALAND
* The Financial Services Council is standing by its new codeof conduct following criticism from some quarters on the exemption ofsuperannuation funds from the new norms, TheAustralian reported.The new framework will not apply to superannuation funds that offer nearlyone-third of life insurance policies in Australia.
* Australian fund manager MLC, a unit of , isplanning to move away from junk bonds after it doubled its holdings in suchbonds in less than two years to about 10%, Bloomberg News reported,citing Stuart Piper, MLC's Sydney-based head of fixed income.
* CBL Corp. said it received regulatory approval for theacquisition ofFrance-based Securities and Financial Solutions Europe SA, or SFS, for NZ$150million, Scoop Media reported.SFS is currently the largest client of CBL Corp., which specializes ininternational credit and financial risk insurance.
IN OTHER PARTS OF THEWORLD
Middle East & Africa: QNB posts Q3 result; Kenyan bank gets CEO; Moza Banco future ontable
Europe: RBSdata leak; Tryg Q3 earnings; Falcon Private Bank fined
Latin America: UBS to restructure Mexican ops; Banco Votorantim investing infintech startups
North America: Wells COO expects return of government deals; bank employeescomplain of other bad practices
North America Insurance: Expected Hurricane Matthew losses drop; insurers push back againstCanada housing rules
S&P Global Ratingsand S&P Global Market Intelligence are owned by S&P Global Inc.
Sally Wang, JonathanCheah, Jaekwon Lim and Santibhap Ussavasodhi contributed to this report.
The Daily Dose has aneditorial deadline of 6:30 a.m. Hong Kong time. Some external links may requirea subscription.