Asia-Pacific

Olam should show, not tell in Muddy Waters fight

28 Nov 2012

The commodities trader has rejected the short-seller’s belief that it’s heading for an Enron-style collapse. But claims of solvency may not be enough. To convince creditors, the company could follow the example set by U.S. broker Jefferies and liquidate some of its assets.

China’s big-cap bond issuers are in a sweet spot

28 Nov 2012

Issuers like Baidu and China Cosco are finding they can sell bonds in U.S. dollars at attractive rates. Floods of liquidity have pushed down yields, and investors who had underweighted China are regaining interest. Investment banks, meanwhile, are keen to get deals done.

Hong Kong offers refuge for China’s orphan stocks

27 Nov 2012

Transport firm CIMC plans to swap its foreign currency “B shares” from Shenzhen to Hong Kong. Capital controls mean it’s not simple. But this offers investors a way out of an illiquid and low-valued investment, and helps tie up a loose end in China’s capital markets. 

Australia can’t pin its growth hopes on property

27 Nov 2012

As the mining boom sputters, property is being tipped as the country’s new economic engine. Falling interest rates and rising rents suggest a decade-long slide in housing investment may soon be over. But giving up some growth may be more prudent than stoking a real-estate bubble.

China’s nemesis: bribes, banquets and backslapping

26 Nov 2012

Graft plagues China, but official extravagance and nepotism are more visible and harder to stamp out. New anti-corruption chief Wang Qishan may clamp down on those flaunting Audis and Rolexes, but while the state retains a grip on key resources, shady dealing will drag on growth.

Worry over state-owned acquirers may be overdone

23 Nov 2012

Canada’s prime minister, mulling CNOOC’s bid for Nexen, is skeptical of firms controlled by foreign governments. The fear is their motives are more than commercial. But evidence from nearly 200 deals suggests that if state buyers have a hidden agenda, they aren’t paying for it.

New risk factor for China stocks: divorce

23 Nov 2012

Longfor Properties shares dropped as its founding couple split, sparking fear of a covenant breach. It’s not the first Chinese company to be shaken by a marital rift. As divorce rates rise, investors should note that entrepreneurs’ private wobbles can have public consequences.

Market limbo gets another extension

22 Nov 2012

China’s manufacturers have reported expanding output for the first time in more than a year. Data also show the U.S. recovery continues. These are big pluses. But a plunge in German services indicates the world is running on two out of three engines. European slowdown and the U.S. fiscal cliff will keep markets on edge.

PICC seeks strength in numbers ahead of IPO

22 Nov 2012

The Chinese insurer’s 17 investment banks have signed up 17 “cornerstone” backers in advance of its $3.6 bln offering. Though they’re hardly big-name value investors, they are buying more than half the available shares. In a tough market, PICC needs all the help it can get.

BOJ must shed freedom but keep the printing press

21 Nov 2012

Japan’s politicians are making an election issue out of the somewhat quaint subject of central bank independence. While Prime Minister Noda’s dogged defence of the BOJ’s freedom is intellectually outdated, his challenger Abe’s plan to hijack the money-printing process is risky.

Short-seller raises stakes with Singaporean attack

20 Nov 2012

Shares in Olam have been suspended after Muddy Waters founder Carson Block questioned its accounts. His record of exposing Chinese frauds will make investors take notice. But the commodity trader, and largest shareholder Temasek, are bigger game. Both sides have much to lose.

Weibo has reason to “open sesame” to Alibaba

20 Nov 2012

China’s Twitter may be considering selling a stake to the country’s largest e-commerce group. It could pave the way for owner Sina to spin Weibo off, and create revenue synergies for both. Minority stakes have limits, but co-operation might ultimately make Weibo more valuable.

Amazon of China defies down-round blues after all

20 Nov 2012

The valuation of online shopping site 360buy swelled by 15 pct to $7.6 bln in a year, despite widening losses. VCs continue to pour money into China’s crowded e-commerce space. But as players increasingly compete for market share by discounting, profits look ever more elusive.

India in depth: Economy unmoved by shock therapy

20 Nov 2012

The government’s high-decibel reform campaign hasn’t brought much succour to the listless economy. The stock market rally is losing steam, and the rupee is weakening. The slowdown in bank credit, which is critical for an investment revival, may continue into next year.

HSBC needs to put numbers on China ambition

19 Nov 2012

The emerging market lender is in talks to offload its $9.2 bln stake in insurer Ping An. A sale fits HSBC’s focus on capital efficiency. But now CEO Stuart Gulliver should explain why the bank’s even larger shareholding in Bank of Communications still makes financial sense.

China has easier path than buying West’s resources

15 Nov 2012

Companies from the PRC and elsewhere have met political flak trying to acquire U.S. and Canadian energy firms that hold oil and gas rights. A smarter strategy could be to snag know-how needed to unlock reserves at home. Oil services experts like $7 bln Weatherford fit the bill.

China’s leadership line-up gets 6.5 out of 10

15 Nov 2012

The new Standing Committee looks conservative, but its seven members don’t lack experience. Judged on criteria like crisis management and economic growth, there’s enough to offer encouragement. But factional ties and a lack of diversity count against them.

Old hands to become China’s new finance guards

15 Nov 2012

China’s central bank chief may retire after being left out on the Party’s central committee. The head of China’s sovereign wealth fund and Bank of China’s chairman are likely to take key finance jobs. Although the state keeps a tight grip, personal styles still matter.

China buzzword bingo shows slow move forward

14 Nov 2012

Little things mean a lot in the highly choreographed Party Congress. To judge by his choice of key terms, outgoing leader Hu Jintao wants to move ahead, but not too quickly. Compared to five years ago, there’s less reform, more socialism, a bit more equality and a lot less Marx.

Silicon Valley cash alone won’t salvage Sharp

14 Nov 2012

Even coming from Qualcomm and Intel, a $378 mln investment won’t help the ailing electronics group. It has net debt of $12 bln and is bleeding cash. The best hope is that the U.S. groups see potential in Sharp’s long-overdue restructuring.