16 Business Daily Monday, June 27 2016
Closing Central bank head
PBOC to study Alibaba’s shadow-banking activities
had with International Monetary Fund Managing Director Christine Lagarde in Washington. China’s central bank will study shadow-banking Alibaba applied for and was granted banking and payment licenses, he said. “But according activities at Alibaba Group Holding Ltd. as it to the definition of FSB about shadow banking... tries to ensure a fair environment exists for we see some of the phenomena for the maturity competition in the industry, Governor Zhou transformation, or the leverage is too high, and Xiaochuan said. Alibaba engages in activities the capital requirements are different from that fall under the Financial Stability Board’s traditional banking,” Zhou said in the video on (FSB) definition of shadow banking and are the IMF’s website. “So you know it gives signals subject to different capital requirements than for many others to follow. Sooner or later I think traditional banks, Zhou said. The central bank governor’s comments were carried in a Chinese- we are going to study on this issue, to set up a language translation of an interview in English he more equal footing competition.” Bloomberg News
AIIB
China touts new bank’s greater understanding of developing world The AIIB’s board approved its first four deals worth US$509 million on Friday. Ben Blanchard
T
he China-led Asian Infrastructure Investment Bank (AIIB) will be different from institutions like the World Bank because it has a greater understanding of the developing world’s needs, officials said yesterday at its first annual meeting. Chinese President Xi Jinping proposed the bank two years ago and it began operations in January, with 57 founding member countries and US$100 billion in committed capital, which it plans to invest in projects across the region.
“The AIIB needs to establish its comparative advantage relative to existing multilateral development banks like the World Bank” Lou Jiwei, Chinese Finance Minister The AIIB, which intends to invest US$1.2 billion this year, has said it is aiming to meet international standards of governance, though
some members say there is still work to be done. Speaking on the final day of the bank’s inaugural annual meeting, Chinese Finance Minister Lou Jiwei said the AIIB needed to establish its niche. “The AIIB needs to establish its comparative advantage relative to existing multilateral development banks like the World Bank,” Lou said. “...Compared with the Asian Development Bank, World Bank and other multilateral development banks, the AIIB’s advantage lies in its keener understanding of the successful experience and lessons of developing countries’ years of development.” The AIIB’s board approved its first four deals worth US$509 million on Friday, with three projects cofinanced with the World Bank, the Asian Development Bank, the United Kingdom Department for International Development and the European Bank for Reconstruction and Development. The co-financed projects are a slum renovation in Indonesia and highway construction in Pakistan and Tajikistan. A power grid upgrade project in Bangladesh will be solely AIIB financed. AIIB President Jin Liqun said it was the focus on infrastructure that specifically marked out the bank as different and that they were committed to the concept of international best practice. “The question is, how do you define
Stock markets
international best practice? I will not agree to anything which could be considered international best practice unless this kind best practice incorporates the development experience of China and many countries in Asia and elsewhere over the last three or four decades,” Jin said. “So our bank would like to have
the development experience, the socalled international best practice, reflecting the experience of China, India (and) so many countries in Asia. So we should have a different model of development.” The AIIB is also looking to expand its numbers this year and will take applications for new members through the end of September. Reuters
Chinese President Xi Jinping (pictured during opening sessions last year) proposed the bank two years ago and it began operations in January
Political impasse
Law enforcement
Egypt’s bourse suspends European Parliament urges trading on 70 stocks after collapse Britain to begin exit Tuesday
Myanmar torches drugs worth nearly US$60 million
The Egyptian Exchange suspended yesterday trading on 70 stocks minutes after the start of the trading session as they fell by the maximum drop level allowed in a single session, state-run MENA news agency reported. According to MENA, the bourse continued downward trend with losses amounting to 16 billion pounds (about US$1.8 billion) in the first minutes of yesterday’s session prompted by the negative effects of Britain’s exit from the European Union on the world stock markets. Earlier in the day, MENA reported that the market capital lost 14 billion pounds in the first two minutes of the session to hit 378.2 billion pounds against 392.2 billion pounds. The market capital kept going down to hit 376.3 billion pounds after dozens of stocks fell by more than 10 percent, which is the maximum drop level allowed in a single session The exit of Britain from the EU has negatively affected global stock markets, with experts expecting that Britain’s divorce with EU will paralyze several world, and mainly European, economies for a long period of time. Xinhua
Myanmar police yesterday torched drugs with a street value of nearly US$60 million as authorities struggle to tackle t h e s c o u rg e o f p o p p y c u l t i va t i o n a n d sh u t d o w n p i l l l ab o rat o r i e s i n l a w l e s s border zones. The impoverished nation remains the world’s s ec o n d bi gg est p r o d u c e r o f o p i u m f r o m w hi ch h e r o i n i s m a d e, acc o r di n g t o th e United Nations. Decades of corrupt military rule and continuing civil wars with ethnic rebels are blamed for fuelling the drugs trade. To mark the UN’s annual anti-drugs day, seized drugs and precursor chemicals were burnt in three places across Myanmar. Over half a ton of opium and 80 kilogrammes of heroin was torched along with 768 kg of methamphetamines and 10 million other stimulant pills, a police official told AFP, adding the haul was worth around US$57 million. At a ceremony in the capital Naypyidaw, Vice-President Myint Swe conceded the battle to stem drug production was far from being won. AFP
The European Parliament’s chief called yesterday for British Prime Minister David Cameron to begin formal proceedings to leave the EU at a summit this week. Martin Schulz told German newspaper Bild am Sonntag that a period of limbo over Brexit would “lead to even more insecurity and thus endanger jobs”. “Hesitating simply to accommodate the party tactics of the British conservatives hurts everyone,” he said. “That is why we expect the British government to now deliver. The summit on Tuesday is the right time.” The four biggest groups in the European Parliament have also drawn up a draft resolution calling for Cameron to set the Brexit ball rolling on Tuesday, Germany’s Frankfurter Allgemeine Sonntagszeitung reported. This was crucial, the groups wrote, “to avoid damaging uncertainty for all and to preserve the integrity of the union”. They added that “no new relationship of whatever kind between the United Kingdom and the EU can be agreed before (Britain’s) exit accord has been completed”. AFP