Asia-Pacific

It’s 20.12.2012; and it’s the end of a magical era

20 Dec 2012

One doesn’t have to be a Mayan to believe that tomorrow represents a numerological end of an era. It may not mark the end of the world - as some users of the Mesoamerican Long Count Calendar suggest - but after a fertile period for adorable dates, we are now entering a desert.

Shadow banks lead China towards a dark place

20 Dec 2012

The secret sauce in the country’s growth is no longer bank lending, but an explosion in off-balance sheet credit. The troubling expansion of funds extended through wealth management products - many of them short-term and dependent on confidence - may force a moment of reckoning.

Bank of Japan needs new rules of engagement

20 Dec 2012

The central bank has agreed to print more money. But ending deflation requires it to adopt a government-mandated price target, and for lawmakers to boost its firepower. That need not undermine the BOJ’s independence, provided the new system is transparent and has legal sanctity.

New Korean leader may be more Merkel than Thatcher

19 Dec 2012

Park Geun-hye, the first woman elected president, is the daughter of a military autocrat. Though conservative, policies including social spending and curbs on conglomerates run left of the incumbent’s. Korea can afford it: German pragmatism is needed, not Maggie’s radicalism.

Ethical economy: Greed, justice and deception

19 Dec 2012

“Greedy” has become a common insult since the financial crisis. But admissions of greed remain scarce. That’s because people see their own immoderate desires as a virtuous search for justice. A humble examination of the flaws in prosperous societies is required to find the truth.

Shanghai stocks set to catch Hong Kong peers

19 Dec 2012

A sharp jump in Shanghai’s index has narrowed the discount between mainland and Hong Kong-listed stocks. Increased quotas for foreign institutions have helped sentiment. If Chinese investors rediscover their enthusiasm for shares, Shanghai may regain its premium.

South Korea’s next leader will face a currency war

19 Dec 2012

Pyongyang’s provocations won’t be the only test awaiting the nation’s new president. The won’s five-year slide against the yen could reverse. The resulting export squeeze means the winner of today’s poll must be careful about clipping the wings of the country’s mighty chaebols.

Animal spirits will stir buyout barons before CEOs

18 Dec 2012

Megadeals have been in short supply for both since 2008. But corporate bosses keep getting rewarded for modest acquisitions while Glencore and HP are warnings against going big. For private equity, though, cash stockpiles and cheap money will be catalysts for a bolder 2013.

India in depth: Consumption bets will outperform

18 Dec 2012

In 2013, the economy will plod through its fifth year of deficit-fuelled, bad-quality GDP growth. A stock-picking strategy tilted toward consumption will yield greater rewards than premature bets on an investment recovery, which is still some distance away.

Abe era will herald a three-digit yen

17 Dec 2012

Japan’s newly elected prime minister will slay the currency to save the economy. That means it will make the kind of move it made after Lehman collapsed in 2008 – but in reverse. Then, risk aversion saw the yen rise 20 percent. In 2013, a U.S. dollar will buy 100 yen or more.

Singapore property spat may hinge on tax oddity

14 Dec 2012

SC Global’s controlling shareholder has offered to take the high-end apartment developer private. Large investor Wheelock is holding out for a better price. Ending the standoff may require some clarity about Singapore’s discriminatory approach to taxing foreign-owned property.

India’s Jet a better bet than Kingfisher for Etihad

14 Dec 2012

The Abu Dhabi airline is spoilt for choice in India. It can rescue and run grounded Kingfisher, or buy a smaller stake in better-managed Jet Airways. The latter offers a better fit. Besides, a low-key and passive entry into a market that is just opening up makes more sense.

Clouds gather over Focus Media buyout

13 Dec 2012

A Chinese private equity firm has dropped out of the club bidding $3.5 bln for the mainland display advertiser. The company founder’s desire to take some cash out has raised further concerns. The Carlyle-led consortium may press ahead, but shareholders face a tense wait.

Swiss chocolate firm switches to junk diet for M&A

12 Dec 2012

Barry Callebaut is splurging nearly $1 bln in Asia, and enduring credit downgrades to “junk”. And all that for a business that’s having a horrid year. But there are real savings and strategic logic. For bold M&A, having patient family backers and a non-euro zone base must help.

Nat Rothschild’s Bumi plan still faces obstacles

11 Dec 2012

The financier said that top Bumi Plc shareholders back his plan for unwinding the disastrous mining tie-up with Indonesia’s Bakrie family. Investors cheered but the mechanics are murky and a clean break looks tricky. Even if it works, Rothschild’s reputation won’t recover fast.

Japan’s elections: A guide for the perplexed

11 Dec 2012

Dismayed by the centre-left, voters may hand power back to the conservatives. But patience with cosmetic change is running thin. People want a more muscular politics and a strong policy response to chronic deflation. For once, the outcome of Japan’s elections may really matter.

China Inc helps AIG streamline, at a price

10 Dec 2012

Selling its aircraft leasing arm to a Chinese consortium will raise $4.2 bln - half the value of the U.S. government’s remaining stake in the insurer. The cash could help fund a later buy-back. But the price looks mean next to similar deals, and AIG isn’t getting a clean exit.

Canada gets worst of both worlds with oil verdict

10 Dec 2012

Premier Stephen Harper sent a confused signal by approving two bids by foreign state oil firms, but saying no more are welcome. By clearing CNOOC’s $15.1 bln Nexen purchase he misses out on a populist lift. Yet his rhetoric may slow crucial energy investment. It’s a no-win, eh.

Corruption is a deceptively good bad investment

7 Dec 2012

A new list of the world’s most corrupt countries includes some of the past decade’s most lucrative growth markets, such as China and the Philippines. Corruption may not scare investors in the early days. But that doesn’t mean it can’t come back to haunt them later.

China shadow bank shakeout would be welcome

6 Dec 2012

A wealth product goes wrong; a small Chinese bank blames a rogue employee. It sounds trivial. But if Hua Xia’s crisis shakes confidence in China’s shadow banks, it could jeopardise $2 trillion of loans. Sorting it out might be painful, but produce a healthier financial system.