Asia-Pacific

Money printing is actually a great idea

11 Feb 2013

Adair Turner, the UK FSA boss, broke a taboo by suggesting that governments should sometimes just print money to cover deficits. The regulator didn’t go far enough. Governments can create and destroy money at will. They shouldn’t be afraid to do so to melt away leverage.

Asia’s city-states grapple with slowing growth

11 Feb 2013

Singapore and Hong Kong have been regional economic hotspots for decades. Continued expansion requires importing more workers. But popular discontent about crowding and property prices means doors will be less open. Both cities will have to adapt to more pedestrian futures.

Tokyo stocks: this time could really be different

8 Feb 2013

Hopes are rising that Japanese equities will rediscover the capacity to deliver positive sustained investment returns. Such hopes have been dashed umpteen times past. But simple valuation measures suggest that, even after the recent rally, Tokyo stocks are worth buying.

Vietnam floats a lifeboat for foreign creditors

8 Feb 2013

The government has helped end a two-year standoff between bankrupt shipbuilder Vinashin and overseas lenders by guaranteeing a new $620 million bond. That will aid the country’s capital market rehabilitation. But the victims of other shipwrecks shouldn’t count on similar rescues.

Dividend reform won’t fix China SOE money-go-round

6 Feb 2013

State-owned firms hoard cash, but making them hand over more of their earnings won’t help. Many already pay more than required, and profit figures can be fudged. Besides, the cash is currently recycled to other SOEs. Reform should start by channeling dividends to better causes.

Japan’s inflation worrywarts good for risky assets

6 Feb 2013

With Prime Minister Shinzo Abe stoking inflation expectations, the country’s pension fund won’t be the only one paring exposure to government bonds. Many Japanese investors will start shopping abroad. From Italian bonds to Russian roubles, riskier investments will get a boost.

Hack attacks may be West’s cue to try harder

6 Feb 2013

China’s alleged attacks on U.S. companies are a new twist on an old theme: outsiders wanting in. China sees itself as the ultimate underdog, so the urge to snoop should fall as it matures. Meanwhile, fears of hacking may spur useful new initiatives in potential targets.

Soccer’s betting scam has echoes of Libor scandal

5 Feb 2013

Rigging the sports fixtures is like manipulating interest rates: both require collusion, are hard to detect, and were partly orchestrated in Singapore. Both also undermine confidence. In finance, the solution is to rely less on human judgment. Soccer cannot do away with referees.

Equity split from commodities may be short lived

4 Feb 2013

Japan’s money-printing rivalry with the U.S. has swept stocks to multi-year highs while commodities lag on worries about slow global growth. The outlook is fundamentally good for both these asset classes, though, as long as central-bank cash keeps flowing into the system.

Weak yen makes Japanese electronics firms giddy

4 Feb 2013

Panasonic shares jumped 17 percent after losses were less bad than expected. Manufacturers have been so badly beaten up that even small changes in profitability have a big impact on expectations. Revenue is still shrinking, though. The recent rally is largely based on hope.

HSBC/Ping An compromise saves face all round

1 Feb 2013

Chinese regulators have approved a Thai tycoon’s $7 bln purchase of HSBC’s stake in insurer Ping An. But the financing had to be rejigged. The Thais have rescued a juicy deal and the UK bank has avoided an embarrassing flop. The seemingly happy ending leaves much to be explained.

Review: Censors are still China’s newsmakers

1 Feb 2013

Journalists fight for the right to break news - but China’s propaganda machine is far from broken. A recent book shows how and why the news is made. It’s still mostly by the state - and for the state.

Index: China tea leaves show recovery still fragile

1 Feb 2013

The Breakingviews Tea Leaf Index fell back to 95.5 at the end of 2012, as housing construction, bank lending and the price of maotai liquor inputs all weakened. There were bright spots: strong air traffic at least suggests Chinese travellers are still on the up.

Profit first casualty in China’s mobile ad war

1 Feb 2013

As China’s 560 million web users go mobile, online giants face a dilemma over how to corner the smartphone ad market. Ideas and scale both count. Tencent has killer app WeChat, while Baidu is offering users storage on its servers. Whoever wins, margins are likely to come down.

Japan helps Nomura put a bad year behind it

31 Jan 2013

Scandals and resignations didn’t prevent the investment bank from delivering a 33 pct jump in underlying pre-tax profit in the last quarter. A recovering Japan helped. A scaled-back Nomura is starting to look consistently profitable. Now it needs to boost its return on equity.

Ethical economy: Taxes and human nature

30 Jan 2013

Complex tax codes are supposed to promote justice and efficiency, but they fail, largely because people are too tempted to take unfair advantage of these elaborate systems. It’s time to admit failure and move to ultra-simple taxes. Use spending to express the government’s will.

Singapore’s demographic engineering on right track

30 Jan 2013

Using immigrants to boost an ageing population by 30 percent is worth a try. The alternative is slowing GDP growth, and a decline in property prices. Voters will be nervous, but the usual fears of overcrowding and loss of national identity are probably overblown.

Myanmar needs private growth more than public debt

30 Jan 2013

Now it has a Paris Club debt relief agreement, aid agencies will flock to lend to Myanmar’s government, as will global banks. Myanmar should avoid taking too much easy money; private sector growth through domestic savings and property rights matters more than infrastructure.

Currency war is not worth fighting

29 Jan 2013

The downside of competitive devaluations is clear: international ill will and higher risks of both inflation and financial disorder. The upside is less clear. In developed economies, devaluations don’t always boost exports. They can also defer helpful reforms.

Rate cuts won’t revive India’s stalled growth

29 Jan 2013

The latest reduction in interest rates will be as futile as the previous one nine months ago. GDP growth will pick up when New Delhi curbs its own profligacy and improves the investment climate. The February budget may be the current government’s last chance to do both.