Asia-Pacific

OPEC ill-placed to stop oil price slide

8 Jun 2012

Some of the cartel’s worst infighting in its 50-year history hangs over next week’s meeting. That won’t help it cope with the euro crisis, which shows no signs of easing and augurs poorly for the price of crude. The evidence suggests OPEC won’t be able to do much about it.

Disney’s sports battle with Murdoch goes global

8 Jun 2012

The rival media empires keep ratcheting up the war to broadcast everything from baseball to soccer in America and Europe. Now, they’re set to square off over cricket and more in Asia, after dissolving a 16-year partnership. The rising value of sports rights just got another bump.

China moves in right direction on bank flexibility

8 Jun 2012

Beijing has given banks a little more freedom on setting interest rates. The surprise change looks tentative, as usual. But allowing the market to play a bigger role in capital allocation will help both savers and companies, at the cost of its overly profitable banks.

India makes small cut in capital market red tape

8 Jun 2012

The decision to open India’s capital markets to new individual investors is welcome. But the government is dreaming to think the modest change will bring in $45 billion a year. Only substantial moves to make the economy more welcoming can attract that much money.

China is fortunate in its policy flexibility

7 Jun 2012

Policymakers in developed economies have reasons to be jealous. Beijing can plausibly hope that its textbook stimulus programme - including Thursday’s 25 basis point cut in benchmark rates - will succeed in boosting growth. Elsewhere, conventional policy has run its course.

Investors in India’s Reliance need more to rely on

6 Jun 2012

The Indian conglomerate is underperforming. Reliance also has $14 billion in cash but doesn’t seem to know what to do with it – though it has a half-hearted share buyback programme. Investors gathering for their annual meeting are in need of commercial and financial refreshment.

Time for China to look beyond Deng’s big ideas

6 Jun 2012

It doesn’t matter if a cat is black or white, so long as it catches mice. Cross the river by feeling for stones. Those lines from China’s leader pushed the economy forward three decades ago. Now they often serve as excuses for persisting in bad habits and delaying reforms.

Liquidity fears trump sense in Asia’s markets

5 Jun 2012

Investors fretting about a euro breakup are moving into the wrong Asian markets. They are favouring liquid Australian and South Korean bonds. But it is hot money that could burn investors if the story changes. Higher-yield bonds from say, the Philippines, might be a better bet.

Activist flushes out Nomura and investor weakness

4 Jun 2012

An anonymous shareholder has filed all 18 independent proposals for the Japanese firm’s annual meeting. Some are peculiar, like suggesting workers squat on the toilet. Others are more mainstream. If nothing else, the secret scribe exposes the supine nature of Japan’s investors.

Asia offers Myanmar development do’s and don’ts

4 Jun 2012

One advantage of 50 years of isolation is being able to learn from neighbours’ mistakes. Myanmar isn’t a blank slate, but has a rare chance to get right on corruption, property, infrastructure, education, foreign investment, trade, markets, and currency what others got so wrong.

Graff’s new luxury paradigm hits the rocks

31 May 2012

Falling markets and the Facebook IPO flop have helped sink Graff Diamonds’ $4 billion Hong Kong listing. But Graff came with hard-to-sell quirks. The bet that investors would buy into a “new” kind of luxury at a time of risk aversion was too optimistic.

High-end luxury looks exposed as China slows

31 May 2012

Hong Kong’s arts auction and property market is cooling as mainland Chinese buyers retreat. Tighter credit and China’s political cycle have both played a role. The hardest hit could be “hard” luxury products like sports cars and watches, often assumed to be the most resilient.

India needs an adult conversation

31 May 2012

As GDP growth slumps to 5.3 pct, the county goes on strike. The people are up in arms over a sensible cut in petrol subsidies. The government’s instinct is to pander and roll back, but it might get more respect by telling the truth about what’s needed to get the economy moving.

China bankers’ bad habits die hard

31 May 2012

The investigation of a top AgBank executive will remind investors of the frauds that dogged Chinese banks of old. Lenders have come far, but low pay, poor disclosure and incomplete reforms leave much scope for bad behaviour. As banks’ balance sheets get bigger, so do the risks.

Li Ka-shing opts for succession China-style

30 May 2012

The HK tycoon has avoided a power scramble by naming his eldest son as heir to his business empire. To ensure Li’s values prevail, his successor will be surrounded by long time acolytes. It’s much like what’s happening in Beijing. In both cases, the newbies will need new tactics.

Japan’s $3.6 bln Gavilon buy goes with the grain

29 May 2012

Marubeni’s swoop on U.S. agricultural specialist Gavilon can be put down to a strong yen and commodity traders’ quest for scale. As long as China’s appetite for commodities keeps growing, so will M&A among its suppliers.

India’s welcome market reform comes with a bonus

29 May 2012

In removing the option to settle serious cases by paying a fine, SEBI has created some confusion. What happens to active cases such as the one against Reliance Industries? The regulator could allow those under investigation one last chance to make a juicy offer it can’t refuse.

EU probe shows hidden costs of China subsidies

28 May 2012

A mooted trade case against telecom vendors may hinge on their access to state credit. Yet Huawei and ZTE are competitive enough not to need such perks. State support for national champions may now be turning into a disadvantage, since it makes it easy for others to cry foul play.

Lady Gaga not the only one turned off by Indonesia

28 May 2012

The pop diva nixed a planned show over conservative protests and demands she tone down her act. Investors feel similar about demands they cede some control in mining and finance. Many are now selling stocks and the rupiah. Indonesia’s assertive new strut may backfire.

Indian oil producers may be due a windfall

28 May 2012

Delhi presently subsidises refiners, and forces state-owned oil companies to bear part of the cost. Growing deficits mean that can’t continue. A logical move is for the government to let the price of diesel rise, which could mean a boost for the likes of Oil and Natural Gas Corp.