Asia-Pacific

Value push will mostly survive Japan election mess

29 Oct 2024

A decade-long effort to boost shareholder returns can continue to gain traction despite the LDP's disaster at the polls. It helps that Japan Exchange took charge of the party's initiative for structural reform. For now, as politicians vie for power, a weak yen will buoy stocks.

China’s SOEs bulk up for market heavy lifting

29 Oct 2024

Guotai Junan and Haitong's proposed merger to form a mega-brokerage is the latest in a raft of deals. Beijing wants its state-owned enterprises to be larger to boost its $11 trln stock market. But unlocking cost savings and cutting overcapacity will be the real challenge.

Philips’ China misery renews case for bold surgery

28 Oct 2024

The $25 bln Dutch medical group’s shares fell up to 17% after it said it would barely grow this year. Weak demand in its key Chinese market means any recovery is far off. The weak outlook makes it harder to justify keeping its sprawling consumer and healthcare divisions together.

Many roadblocks delay journey to zero carbon world

28 Oct 2024

While solar power and battery supply have grown massively, the same is not true of electricity grids, green hydrogen and carbon removal. Money is more expensive. This means demand for oil, gas and coal has not yet peaked. The setback will cost the planet dearly.

Election throws Japan into turbulent waters

28 Oct 2024

The ruling LDP's drubbing at the polls means whichever party forms the government will have to rely on rivals. That will add pressure to boost fiscal spending and make it harder for the central bank to raise rates, slowing the country's economic transformation.

India’s microfinance trouble goes mainstream

28 Oct 2024

IndusInd Bank shares dropped 19%, wiping out $2 bln or over half the value of its loans to the poor. Investors are pricing in an asset quality meltdown far worse than the lender’s rising delinquencies imply, and a possible throwback to the 2010 crisis that blew up the industry.

Founder’s syndrome gets a new enabler

25 Oct 2024

Shares in $25 bln WiseTech soared 14% after the software firm dropped its scandal-hit CEO Richard White only to keep him on as "founder and founding CEO". Faced with a classic key-man risk problem, the board chose a farcical workaround. It sets them up poorly for the long run.

China robotaxi IPOs may struggle to find their way

25 Oct 2024

Pony AI and rival WeRide are prepping US listings. But shares in fellow autonomous-vehicle pioneers like Mobileye and Hesai have lost half their value or more in the past year, and the road to profitability for driverless cabs looks long. That makes these deals a harder sell.

Why stablecoins will entrench dollar’s supremacy

25 Oct 2024

A Russian plan to break the greenback’s grip met a cool reception at the BRICS summit in Kazan. The more important monetary news was Stripe’s $1 bln acquisition of digital-currency group Bridge. Dollar-pegged blockchain currency will keep Uncle Sam on top of the monetary order.

Ishiba’s bad election bet will boost Bank of Japan

24 Oct 2024

The new prime minister’s decision to call a snap election next week could see his Liberal Democratic Party lose an outright majority in the lower house. That would weaken Shigeru Ishiba’s long-term prospects but would help safeguard the central bank’s push to slowly raise rates.

Tokyo Metro takes wild ride on inefficient market

23 Oct 2024

Shares of Japan's $7 bln subway operator surged 45% on debut. An official campaign to get savers buying more stocks is working, perhaps too well. A paucity of IPOs means bankers might be rusty on price discovery too. Public market hopefuls will need to tread carefully.

China-India ties will settle into a new normal

23 Oct 2024

A deal on patrolling their disputed frontier is a welcome development. Leaders Xi Jinping and Narendra Modi will meet too. There's little chance of going back to the status quo of business ties four years ago, however. India will keep entry barriers for Chinese companies high.

China pins stimulus on money merry-go-round

23 Oct 2024

Beijing plans to swap some of its $9 trln of local government debt into bonds with full, rather than implicit, state backing. The rejig will lower rates of interest, lengthen maturities and allow provinces to issue more debt to banks. That will juice spending for a while.

New CEO clicks HSBC Rubik’s cube into right place

22 Oct 2024

The $160 bln lender’s new boss is tackling the bank’s unwieldy structure. Separating the top performing UK and Hong Kong units from everything else globally looks smart. But it may one day invite questions about why these retail units are inside HSBC in the first place.

India’s lenders face the end of lazy banking

22 Oct 2024

Gold, real estate and a booming stock market are sapping deposit growth. That's hurting earnings at banks like SBI and HDFC that rely heavily on interest income. But it can also be a spur for the industry to follow Western peers and bulk up in businesses that charge fees.

China can help itself with a stronger stock market

22 Oct 2024

President Xi Jinping wants companies worth some $11 trln to deliver better returns. Boosting long-term value would reassure anxious savers and help bring down government debt. Taming volatility, though, will require Beijing to cede some control.

BHP’s dam disaster dealings leave a bad taste

21 Oct 2024

The miner and partners are offering Brazilian authorities $23 bln in damages for a 2015 catastrophe, but with most of it paid over 20 years. And BHP was in hot water trying to hinder a related $47 bln lawsuit in London. Both take the argument of protecting shareholders too far.

Bidders poke holes in Japan’s fair M&A push

21 Oct 2024

Seven & i and Fuji Soft have each dug in their heels against generous takeover approaches from Canada's Couche-Tard and buyout firm Bain Capital. New guidelines are reshaping the market for deals in the $4 trln economy, but reluctant targets retain power to simply say no.

Inflation is not dead, it’s just resting

18 Oct 2024

Annual price increases are returning to the subdued 2% level targeted by many central banks. Official interest rates are falling too. Yet there’s a long history of policymakers prematurely celebrating the end of inflation. The experience of the 1970s offers a cautionary tale.

China’s growth reprieve will be short-lived

18 Oct 2024

Third quarter output slowed to 4.6% on subdued retail sales and property investment but Beijing's target pace of "around 5%" needs sustaining to achieve developed economy status by 2035. Unless policymakers move their own goalposts, they'll have to contort themselves a lot more.