Asia-Pacific

India no longer deserves a credit upgrade

22 May 2012

New Delhi is lobbying Fitch to say it’s more creditworthy, arguing that foreign inflows protect it from a persistent current account gap. The tumbling rupee says otherwise. With slowing growth likely to keep government debt high, the risk is that those inflows go the other way.

Long-awaited Yahoo deal heaps pressure on Alibaba

21 May 2012

The Chinese e-commerce giant wants new investors to fund a $7 billion buyback of shares from Yahoo. Takers may include funds who just cashed in from Facebook’s IPO. But Alibaba’s valuation leaves little room for error. New investors will want growth and, one day, an exit.

Graff Diamonds IPO gleams but doesn’t dazzle

21 May 2012

The diamond merchant’s Hong Kong listing taps directly into the growth of the 0.1 percent. But even the super-rich are vulnerable to a financial crisis. A sober appraisal, which hinges on the value of Graff’s enormous stockpile, suggests the $4 billion price is fair but no steal.

Review: Rather more than a middling kingdom

18 May 2012

Economic growth in China is “remarkable”, say economists John Knight and Sai Ding. Their statistical, theoretical and narrative analysis suggests it may be rather more than that. The work also makes a convincing case that China’s success will breed more of the same.

Temasek makes unlikely corporate governance hero

18 May 2012

The Singaporean fund abstained from backing several Standard Chartered directors, apparently because the UK lender’s board had become less independent. Temasek would gain much by speaking out on such topics - even if it sits uneasily with its growing investments in Chinese banks.

Myanmar must brace for post-sanctions cash deluge

18 May 2012

With U.S. sanctions suspended, it is open season for investment. Myanmar is already teeming with potential investors eyeing its resources and consumers. Undeterred by weak legal and financial infrastructure, their cash could fuel inflation, corruption and inequality.

Asia should beckon for FSB secretariat

18 May 2012

Only 12 percent of the top people at supposedly global financial authorities are Asians. And none of their headquarters are in Asia. The G20 could start to redress this global imbalance by an eastward move from Basel for 20 people at the top of the Financial Stability Board.

India’s slipping on oil as well as Greece

17 May 2012

It’s easy to blame the EU for India’s woes. But politicians shouldn’t fall into the Greek trap of knowing what’s good for them but failing to act. The currency’s decline should be a trigger for government action. Popular but expensive fuel subsidies are the place to start.

Samsung investors should worry less about Apple

17 May 2012

The Korean company’s shares slid over fears Apple might use fewer of its chips, and buy more Japanese ones instead. Apple may diversify its suppliers, but that just reflects the fact that smartphone demand is outpacing parts supply. Samsung’s valuation looks too low.

Global sell-off could echo summer of 2011

16 May 2012

Markets fear a chaotic Greek euro exit. Unless Europe helps Athens more, the sell-off is likely to deepen. Weak global growth doesn’t help. Oil and stocks could return to last year’s lows. As then, the dollar and safe bonds are the sanctuary - but this time, gold is vulnerable.

Asia’s bonds look shinier as Europe and China slump

16 May 2012

The region’s robust finances have made its sovereign debt a safe haven as bigger economies stall. An indiscriminate sell-off will affect everyone, but Indonesia, Japan and the Philippines all have qualities that should leave them less hard hit.

China discovers the downside of a freer yuan

16 May 2012

Chinese exporters seem to be responding to the offshore yuan market’s prediction of a weaker domestic currency. They’re holding onto more of their foreign receipts, rather than trading them for yuan deposits. The result: a squeeze on the banks and a headache for the government.

India has chance to get a good finance minister

16 May 2012

The current minister, Pranab Mukherjee, has been an abject failure: the rupee’s record low is just the latest example of the economy’s problems. Now Mukherjee wants to move to the ceremonial role of president. Sonia Gandhi should bite his hand off.

Chongqing won’t be allowed to fail with Bo

15 May 2012

The Chinese city looks in line for a bailout after former leader Bo Xilai’s fall. A policy bank is ploughing in new funds, and state-owned firms are enlisted for help. Even though Chongqing’s debt-financed growth model is discredited, the need for stability prevails.

China has strongest hand in Philippine stand-off

15 May 2012

Manila protests China’s claims on disputed islands, but its economic position is weak. China is a big export customer, and has the money and tourists Manila needs to dig mines and fill new casinos. Whoever owns the South China Sea’s energy riches, China will be the biggest buyer.

Property slowdown leaves China on shaky ground

14 May 2012

It has taken property developers a year of falling prices to rein in speculative behaviour. Now the message seems to be hitting home. If construction slows, growth will too. And if caution replaces speculation, the Chinese economy could end up with a painfully hard landing.

Weak trade and weak banks pose Chinese puzzle

10 May 2012

Weak April imports are a clear sign that China’s domestic demand is sputtering. The government might like to respond with looser monetary policy, but many banks are too short of funds to help. Beijing’s usual methods may not produce the usual results.

Hong Kong’s LME bid is big bet on China flows

10 May 2012

Hong Kong’s bourse has joined the bidding for the London Metal Exchange. If it can attract more volume from China, that would make up for the lack of obvious cost savings. But Beijing may open up anyway. HK’s lack of metals expertise makes the move look ambitious.

India’s draconian FX grab won’t help weak rupee

10 May 2012

Forcing exporters to convert half their foreign currency will net less than $3 billion - not enough to make much difference to the weak rupee. Heavy-handed intervention may also scare away the foreign investors India needs to fund its ballooning trade deficit.

Temasek’s triple personality bodes well for returns

9 May 2012

The Singaporean state investor is developing the trading eye of a hedge fund, a private equity taste for financial engineering, and the pay structure of an investment bank. That should improve its sub-par performance, though it won’t always sit well with Temasek’s political ties.