Asia-Pacific

Li & Fung finds dreams don’t always come true

10 Aug 2012

The ambitious Hong Kong listed trading and logistics company sells at an elevated multiple, based on promises of rapid growth from a confident chief executive. The shares dropped 20 percent after a disappointing first half. They still look expensive for this cyclical business.

India begins the post-Mukherjee clear-up

9 Aug 2012

The former Indian finance minister’s reign was stained by economic meddling and political favouritism. Now he is gone, and some of his excesses are being reversed. An enemy has been pardoned and a friend has not received a plum job. This could be the beginning of a better era.

Heineken should call Thai bluff for Tiger beer

8 Aug 2012

A Thai mogul has pipped the Dutch brewer’s S$50 a share bid for Asia Pacific Breweries with a higher offer, but only for a minority stake. Heineken shouldn’t bite. It loses little even if its bid fails. It may just end up with a debt-laden partner it can buy out cheaply later.

New Esprit CEO won’t end geographic confusion

8 Aug 2012

The struggling Hong Kong-listed retailer surged after it poached an executive from Spain’s more successful Inditex. Esprit’s Asian headquarters is a poor fit with the business’s European focus. The Eurasian firm needs to find a new brand identity and sharpen its geographic focus.

Indian telcos need a regulatory boost to grow

8 Aug 2012

Bharti Airtel, the market leader, has reported a 10th straight decline in quarterly profit. Overcrowding is forcing prices to rock bottom, and uncertain regulation is preventing consolidation. More data usage will be a boon. Healthier telcos will make a healthier economy too.

StanChart sanction crisis poses cultural questions

7 Aug 2012

The bank strongly rejected a U.S. regulator’s claim it hid $250 bln of payments for Iranian clients. But communications quoted in the probe suggest an arrogant, dissembling culture. With StanChart’s top team little changed since then, the burden of proof lies with the bank.

Japan Inc’s earnings tell worrisome global story

7 Aug 2012

Yes, operating profits at the country’s four biggest manufacturers - Toyota, Nissan, Honda and Hitachi - quintupled in the latest quarter as U.S. and in Japanese growth overwhelmed weaker economies in Europe and China. But the post-tsunami rebound is unlikely to last.

Merger boost looks short-lived for China’s Youku

7 Aug 2012

Revenues at the leader in the Chinese internet video market almost doubled in the last quarter, but losses widened even more. The planned merger with smaller rival Tudou should help lower costs, but deep-pocketed diversified players are catching up. The pair looks vulnerable.

‘Peak’ resource nationalism could get messy

6 Aug 2012

Miners see a silver lining in the fading super-cycle: it lets them be pickier about working with grabby governments. But existing projects will always be vulnerable to expropriation. And populist pandering doesn’t necessarily wax and wane in lock-step with commodity prices.

Strong third Indian party could be game-changer

6 Aug 2012

Anti-corruption campaigner Anna Hazare is developing a political party. His cobbled-together group doesn’t look credible, but a well structured force could be kingmakers – and would be a constructive alternative to the regional parties which have paralysed Indian coalitions.

BYD caught in two Chinese economic traps

6 Aug 2012

Warren Buffett bought into the automaker, but insiders are now selling amid falling profits. BYD expanded too fast after Beijing’s 2009 stimulus. The downturn is hurting its mostly low-end customers. Besides, a fatal tragedy has reinforced the Chinese love of foreign brands.

Heineken’s $6 bln deal should trigger aftershocks

3 Aug 2012

The Dutch brewer is paying a hefty 17 times EBITDA to take control of Asia Pacific Breweries from partner F&N. Heineken had little choice, as it couldn’t let APB slip through its fingers. This sets up F&N’s next act - the dismemberment of the rest of the conglomerate.

Investors may be happy to ride on renovated JAL

3 Aug 2012

The airline’s plans to raise roughly $8.5 bln in an IPO may seem a heavy lift amid weak markets and a perennially limping industry. But big funds will likely clamor for seats on a flight fueled by a mix of government largesse and one of Japan’s most promising turnaround stories.

Italians railroad China’s PLA on soccer pitch

2 Aug 2012

How else to explain an investment in Inter Milan by China Railway Construction, a state group with origins in the People’s Liberation Army? Bragging rights are limited and industrial rationale non-existent. At best it’s a quid pro quo for the contract to build Inter’s new stadium.

China jobs market too hot, too cool and just right

2 Aug 2012

Knowing how many jobs China is creating is hard. Surveys show labour weakness, yet vacancies abound and the reported unemployment rate remains encouragingly low. In reality China has several job markets, each with its own challenges. No wonder politicians focus on growth instead.

Olympics a bad metaphor for economic rivalry

2 Aug 2012

China breaks the rules, the U.S. loses its edge, Britain barely registers at all. It’s easy to see the Games as a mirror for reality. But economics is different. Co-operation is rewarded, the prizes keep growing, and there are many ways to win, provided the competitors play fair.

StanChart finds buffer against Asia slowdown risk

1 Aug 2012

The emerging market lender delivered its customary strong growth in the first half, with income up 9 percent. The worry is that continued expansion comes at the expense of ever-higher bad debts. But StanChart is also benefiting as European rivals retreat from Asia.

Hot money working in Asia’s favor, for a change

1 Aug 2012

When the region’s central bankers were worried about inflation, foreign portfolio investors were their enemy. Rate increases lured hot money, adding to price pressure. Now the Asian authorities want to spur growth, and foreign investors’ thirst for yield is helping them out.

India’s power vacuum needs to be filled

1 Aug 2012

You couldn’t make this up. As the country suffered from the largest blackout in history, the government promoted the power minister and replaced him with a part time substitute. Delhi badly needs to turn the economy around, but it suffers from a gigantic leadership deficit.

NIMBYs are China’s new neighbours from hell

31 Jul 2012

Communities protesting about dirty chemical plants or waste treatment are a rich-country problem come early. Their gripes may be understandable: China faces hefty environmental risks. But appeasing rattled townsfolk drags on growth by lowering the returns from building.