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Daily Dispatches – Banzai Shinzo

Go Shinzo

Go Shinzo

A vote of confidence for Japan’s Prime Minister Shinzo Abe, with his coalition government wining control of both houses of parliament for the first time in six years. The election outcome offers the country a measure of stability after divisive politics saw frequent leadership changes over recent years.

Bloomberg reports that Abe’s Liberal Democratic Party and its coalition partner won a majority of upper house seats in the weekend vote, boosting his ability to carry out a plan of monetary easing, fiscal stimulus and deregulation known as Abenomics.

The win has had a positive knock-on effect in the markets and around the region.

Asian stocks rose, with the regional benchmark breaking its a three-day fall. The yen gained ground, while the MSCI Asia Pacific Index added 0.5% in early trading after slipping 0.8% in the previous three days.

Futures on the Standard & Poor’s 500 Index gained slightly on the record 19 July close. Gold rose 1.3%, and Australia’s dollar strengthened.

Stepping up the pace

China’s long march to a more liberal financial system gained momentum with a decision last week to remove certain restrictions for the country’s lenders.

Bloomberg reports that this is the most significant step yet in the country’s reform of its financial system. The People’s Bank of China ended a floor on borrowing costs previously set at 30% below the benchmark

Some constraints remain, however: The limit on mortgage rates will stay to curb property speculation. Also unchanged is the 10% limit on what banks can offer over PBOC-set deposit rates.

Evercore for Singapore

The FT reports that Evercore Partners, the US independent investment bank, will open an office in Singapore to take advantage of growing opportunities in the merger advisory and capital-raising business across South-East Asia.

Evercore has poached Keith Magnus, former head of investment banking for Singapore and Malaysia at UBS, to head the business, which will officially launch when the office opens in October.

A passage away from India

A number of high-profile foreign investors, including Berkshire Hathaway, have cancelled plans to invest in the subcontinent over frustration with weak public policy and the softening economy, reports the Wall Street Journal.

Global retail giant Wal-Mart Stores Inc and steel companies Posco and ArcelorMittal also pulled back on Indian investment plans this week.

Dhanpal Jhaveri, a partner and the chief executive of private-equity firm Everstone Capital, which manages USD$1.8 billion in funds, told the WSJ: “Capital can only be that patient. Beyond a point it becomes impatient and will move on to other geographies.”

Voting for Vietnam

Private equity investment in Vietnam hit USD$585 million in the first seven months of 2013, led by two outsized deals from Warburg Pincus and Kohlberg Kravis Roberts and exceeding full-year totals for the last four years.

Website Private Equity International says that deal value looks set to break the country’s record of USD$750 million set during the boom year of 2007.

Never too young to learn

KidZania theme park in Japan is teaching kids about the world of work – and how to manage money.

ABC News reports that the Tokyo park – one of 13 around the world – lets children practise being firefighters and paramedics, among others, and they earn Kidzos currency for their efforts.  The Kidzos can be used to buy gifts or visit the park again. Park executives say the goal is to teach kids about earning and spending.

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