Asia Pacific

The dollar bond of Kazakhstan's Alliance Bank, controlled by the oil-rich nation's sovereign wealth fund, rose on Monday as investors awaited the terms of the banks' second debt restructuring since the global financial crisis, Reuters reported. Alliance said on Monday it would meet creditors in London on Wednesday. At a similar meeting last month the bank said it would not pay out on a series of recovery notes. Alliance's dollar bond due 2017 rose 1.5 points to 41.5 cents on the dollar, according to Thomson Reuters data.

A high-yielding investment product based on a loan to an indebted coal company is offering the latest test of China's willingness to permit defaults in its shadow banking system, Reuters reported. If the product, which is scheduled to mature on Jan. 31, fails to pay out as promised, it could shatter the widespread assumption that even risky investments carry implicit guarantees from the government and state-owned banks.

A Hong Kong businessman intensified his fight for Fisker Automotive, the bankrupt maker of the plug-in hybrid Karma sports car, seeking an immediate appeal of a ruling that had opened the door for China's Wanxiang Group as a bidder, Reuters reported. The legal team of the businessman, Richard Li, filed an emergency motion late Tuesday seeking permission for a fast-track appeal of a ruling requiring some cash bidding, a day after Li raised his bid for Fisker to $55 million. Without cash bids, Wanxiang did not plan to join the auction. The auction could be held as soon as Feb.

Global regulators have watered down controversial new rules aimed at reining in banks’ reliance on debt, following ferocious industry lobbying, the Financial Times reported. Central bankers and supervisors on Sunday approved an international standard for the leverage ratio – a measure of financial strength that is considered less susceptible to being gamed by bankers – that offers some concessions to banks. The changes announced in Basel, Switzerland, will come as a relief to big investment banks who had been fretting they would be forced to raise billions in extra capital.

The Government Service Insurance System (GSIS) has extended the deadline for its housing loan restructuring program by another six months or until June this year, The Philippine Star reported. In a statement, the state pension fund said member-borrowers with current accounts have until June 30 to avail of the program. Under the program, the GSIS will condone all unpaid penalties and surcharges and grant extended payment terms to qualified applicants.

China's government is gearing up for a spike in nonperforming loans, endorsing a range of options to clean up the banks and experimenting with ways for lenders to squeeze value from debts gone bad, The Wall Street Journal reported. Write-offs have multiplied in recent months. Over-the-counter asset exchanges have sprung up as a way for banks to find buyers for collateral seized from defaulting borrowers and for bad loans they want to spin off.

China’s banking regulator told lenders to publish data including off-balance-sheet assets and interbank liabilities as the government steps up scrutiny of the shadow-finance industry. Lenders with total assets of 1.6 trillion yuan ($264 billion) or more must publish 12 indicators within four months of the end of each financial year, the China Banking Regulatory Commission said in a statement yesterday. The requirement is in line with rules published by the Basel Committee on international banking regulation in July, the CBRC said.

Hong Kong’s banking regulator has demanded far-reaching powers to prop up or shut failing banks, including the ability to suspend creditor rights, as it plays catch-up with western regulators trying prevent a future Lehman Brothers, the Financial Times reported. The Hong Kong Monetary Authority made the calls in the first public consultation from an Asian regulator on a so-called resolution and recovery regime, which is meant to make financial institutions easier to break up and sell in a crisis.

Japan’s huge glacier of stationary household wealth may finally be melting, a development that could help local markets and the country’s economic recovery, The Wall Street Journal Japan Real Time blog reported. After much fanfare, the activation of Nippon Individual Saving Accounts officially kicked off Monday. Part of Prime Minister Shinzo Abe’s economic reform plan, the tax-free NISA system is designed to coax Japan’s chronic savers to put money into stocks, bonds, and other assets to spur domestic growth instead of just parking cash in regular bank accounts.

China will allow a batch of three to five banks funded by private investment this year to operate under a trial as part of the country’s financial reforms, according to the China Banking Regulatory Commission, Bloomberg News reported. China will guide private investment to participate in the restructuring of existing banks and explore lowering the threshold for foreign banks to enter the industry, the banking regulator said in a statement on its website yesterday. The commission will step up its support of the Shanghai free trade zone, according to the statement.