Asia-Pacific

Commodity traders face up to end of good old days

4 Oct 2012

Trading houses’ rush to diversify sources of capital and shed non-core assets partly reflects straitened financial times. But like Goldman’s decision to go public in the 1990s, it’s also about a generational shift and the need for scale in a changing economic order.

Indonesia may be unfairly tarred by Bumi’s brush

4 Oct 2012

The heavily indebted coal miner may sell assets or equity after its London-based parent said it would probe potential fraud. With coal prices weak, Bumi’s plight is trouble for feuding shareholders and creditors. But investors would be wrong to see it as a metaphor for Indonesia.

Spare a thought for the good old-fashioned merger

3 Oct 2012

Global M&A activity this year, at $1.7 trln, is even more insipid than the headline 16 pct drop implies. It’s hard to find a traditional tie-up among the 30 biggest deals amid all the spinoffs, partner buyouts and nationalizations. Bankers cannot live by such bread alone.

Chinese sightseers present challenge to the world

3 Oct 2012

Half the country’s 1.4 billion inhabitants are expected to travel during this week’s national holiday. A new love for tourism provides a much-needed economic boost. But giant traffic jams and a deadly boat crash in Hong Kong underscore the difficulty of coping with the crowds.

India’s Kingfisher can still avoid futile closure

2 Oct 2012

The airline, which suspended operations on Oct. 1 after a labour dispute, can fly again if its licence is not revoked. A full shutdown would hurt creditors unduly - and undercut the government’s decision to welcome foreign carriers as white knights.

India is still unravelling

1 Oct 2012

Nine months after Breakingviews published a three-part series on the country, India’s economy has fallen further behind. Despite the wave of recent policies unveiled by Prime Minister Manmohan Singh, the case for economic reform - and a political realignment - remains as strong as ever.

Vietnam is a bad example to newly emerging markets

1 Oct 2012

The Southeast Asian nation has gone from budding Asian tiger to near-basket case. The global economic slowdown and local corruption are both to blame. Vietnam needs to reboot its banks and foreign investment plans if it’s to offer any positive lessons for the likes of Myanmar.

Beijing can show politics don’t drive Bo case

28 Sep 2012

China’s Communist Party isn’t too embarrassed to throw the book at a former rising star. Bo Xilai is accused of taking bribes, responsibility for murder and improper sexual conduct.  The CCP now has to persuade the public that Bo isn’t being punished for losing a factional fight.

Malaysia’s budget goals are unrealistic and risky

28 Sep 2012

The government says it will reward civil servants with bonuses, ply the poor with handouts and still manage to cut the fiscal deficit in 2013 - a goal that’s both unrealistic and unnecessary. If infrastructure spending is cut, the still new investment revival could suffer.

Bumi fiasco shows danger of bad incentives in M&A

28 Sep 2012

Whatever the truth behind alleged financial irregularities at the Indonesian coal miner, Bumi’s woes raise questions about the incentives that drove Nat Rothschild and other big names in finance to migrate the emerging-market miner to London. Merge in haste, repent at leisure.

What’s the best gauge of China’s growth? You pick.

28 Sep 2012

Numbers abound, but good explanations are scarce. Breakingviews has chosen ten indicators - from steel output to Beijing pollution - and created an interactive index to give a picture of what’s happening. The upshot: things aren’t as bad as in 2008, but they’re not far off.

How Sahara left Indian investors feeling deserted

27 Sep 2012

The conglomerate raised $4.5 billion from millions of small investors. Now it has been ordered to return the cash, its finances face a stiff examination. The saga also raises questions about India’s financial regulation - and how such scandals can be avoided in future.

Japan’s new LDP chief a reversion to welcome past

27 Sep 2012

Budget-cutting former prime minister Shinzo Abe has been chosen to lead the opposition. The current DPJ government has done half Japan’s budget work by increasing the sales tax from 2014. Now an Abe premiership is the country’s best hope of cutting pensions and other spending.

Temasek telco trade offers few clues for StanChart

26 Sep 2012

The Singaporean fund sold a $1.1 billion block of shares in landmark holding SingTel. The latest reshuffle raises further expectations that its 18 percent stake in the UK bank will be next. Though both have delivered good returns, offloading StanChart shares will be harder.

Nixing China’s oil bid may create Canada discount

26 Sep 2012

The market reckons there’s a one-in-four chance politicians will scupper CNOOC’s offer for Nexen. Takeovers by state-owned companies raise tricky questions. But hoisting the Canadian flag over a company of little strategic importance risks further alienating outside investors.

Sunshine may only be partial disinfectant for Bumi

25 Sep 2012

An investigation instigated by independent directors could see a governance revamp at the troubled UK-listed miner. But that won’t tackle the fundamental problem, the fact that Bumi’s main asset is a minority holding that now looks more like a bombed-out financial investment.

Indian power sector bailout is a good first step

25 Sep 2012

The state is taking on some of its utilities’ $35 billion debt, with banks restructuring the rest. That will help fix the underinvestment that led to massive summer blackouts. But the cleanup will only work if distributors are allowed to set prices free of political interference.

Foxconn brawl reflects China’s economic challenges

24 Sep 2012

Reports of violence from one of the Apple supplier’s factories conjure up Western prison riots. That’s unfair, but 79,000 migrant workers, excess hours and dependence on a tough employer make a recipe for tension. It’s the dark side of supplying shiny gadgets to the world.

Bumi reputational damage will spread far and wide

24 Sep 2012

The mining-focused acquisition vehicle has tumbled in value amid alleged financial irregularities in its Indonesian assets. A lack of information makes the shares hard to touch right now. And whatever the final financial fallout, the affair rubs off badly on the London market.

India in depth: Twin deficits joined at the hip

24 Sep 2012

India’s gaping trade deficit has its root in the government’s fiscal excesses, which must be tamed if a repeat of the 1991 currency crisis is to be avoided. A competitive exchange rate will narrow the trade gap over time, but only if monetary policy remains hawkish.