Asia-Pacific

India’s finance minister goes out with a flop

25 Jun 2012

Talk about over promising and under-delivering. Pranab Mukherjee inflated the market’s hopes that he’d take bold measures to boost investor confidence, but came up with a few small tweaks - on his last day as finance minister. Hopefully his successor will talk less and act more.

Japan needs more than apologies on insider trades

22 Jun 2012

Handing a $6 bln privatization to Nomura’s rivals after the bank apologized for leaking earlier share sales seemed like a government rebuke. But Nomura probably lost fair and square. Either way, Tokyo needs to make leaks illegal and trying to profit on them much more painful.

Cement ruling mixes India’s business reputation

21 Jun 2012

New Delhi has done itself a big favour imposing a record $1.1 bln price-fixing fine against 11 cement firms. For all the criticisms recently levelled, it suggests there is an appetite for competition and a willingness to take on vested interests.

Bankers need to follow the money into China

21 Jun 2012

Goldman’s new global vice chairman won’t be the last person to eschew the easier climes of Hong Kong. Mainland China is where foreign banks will add jobs, and where the majority of 2012’s IPOs in Asia took place. Attracting the right talent for the local market will be a challenge.

China bean-counters should open their books

20 Jun 2012

After a rash of accounting slips, America has demanded China-based auditors hand over documents. Such meddling goes down badly in China. But if the government resists, it could end foreign listings and deprive local auditors of skills they’ll need to one day rival the Big Four.

HKEx’s offer for the LME stretches the numbers

20 Jun 2012

The Hong Kong bourse may pay 1.4 bln pounds for the London metals trader. HKEx hopes its investment will yield 10 pct-plus by 2017. A Breakingviews calculator shows Chinese LME trading volume would have to grow over 40 pct a year and become half the business. That’s a tall order.

Japan’s retiree raid augurs political paralysis

20 Jun 2012

The PM has cut a deal to double consumption tax and start paying off debt more than double GDP. It’s a good start if it passes. But raising taxes on Japan’s rising retiree class may be political suicide and further delay spending cuts needed to avoid a sovereign debt crisis.

Corporate India needs a nobler cause than Gupta

18 Jun 2012

India Inc should start defending its own reputation rather than that of Rajat Gupta. Instead of sending an open letter praising the ex-boss of McKinsey, the conviction should be used as a turning point. How about a second draft making the case for stronger business ethics?

Five ways to hedge against a China slowdown

18 Jun 2012

The G20-bound Hu Jintao touted continued growth for the second-largest economy. Yet falling home prices point to cooling. Exposed Asian stocks have suffered. But options, credit default swaps and defensive China assets still offer protection for doubters of the official line.

India’s Congress wins mock fight; now for real one

18 Jun 2012

The government outfoxed its tricky coalition partners to get Pranab Mukherjee, now finance minister, nominated for the ceremonial role of president. But Sonia Gandhi’s party needs to do more to fire up the economy. A strong replacement for Mukherjee would show the way.

Value and diversity protect in tricky markets

15 Jun 2012

No matter their views of the future, good investors prepare for whatever it may bring. That’s tough as another phase of the Europe-centred crisis unfolds. But there are a few spots where basic valuation measures look off, even in an uncertain world, and so present opportunities.

HK exchange makes risky $2.2 bln LME bet

15 Jun 2012

The exchange is paying an alarming 58 times last year’s earnings for the London Metals Exchange - even factoring in its new fee structure. There are no cost synergies, so all depends on whether mainland Chinese buyers will be allowed to play more on foreign commodity markets.

India doesn’t yet face balance of payments crisis

15 Jun 2012

It took the loudest of wake up calls in the 1990s to arouse India from four decades of failed economic policies. Some hope that the current sharp falls in the rupee and the growth rate will provide a similar jolt. The numbers show that a similar crisis isn’t likely - yet.

OPEC starting to look like a cartel of one

14 Jun 2012

Twelve nations belong to the oil export club, but of late only Saudi Arabia has mattered. At the latest meeting, the kingdom again batted away Venezuela, Iran and others who wanted to cut output. The deepening divide in OPEC could face a more serious test if prices keep sliding.

Domestic demand blesses $3 billion Felda IPO

14 Jun 2012

Malaysian palm oil supplier Felda priced near the top of the range, making it the second biggest offering of 2012, and propelling Kuala Lumpur to the top of Asia IPO tables. The reason isn’t just demand for oil but for stocks. South-East Asia’s investors are still hungry.

Bond market misses Korea’s youthful monetary tilt

14 Jun 2012

Global exports are slowing, so investors are buying South Korean bonds to bet its central bank will have to cut rates. But young Koreans increasingly want to work in domestic services, not welding Hyundais. With inflation low and joblessness falling, the bank may just sit tight.

Man Utd’s IPO transfer keeps owners in control

13 Jun 2012

The English soccer club may switch a $1 bln listing from Singapore to New York. So much for brand-building in Asia. Despite public indifference, U.S. investors will see value in a strong global franchise. And the owners can bring over the lopsided governance in the original plan.

Beijing a fitting base for new Goldman vice chair

12 Jun 2012

Bankers often prefer Hong Kong’s lower taxes and easier living. But for the Wall Street firm, locating new Asia chair Mark Schwartz in mainland China is a shrewd move. Beijing looks poised to open and grow its capital markets. Those who can help are likely to be rewarded. 

Delhi’s game of thrones stifles progress

12 Jun 2012

As the Indian growth story has ground to halt so has decisive action and decision making. Machinations over who is to become president and finance minister are pre-occupying New Delhi. As a result nothing is getting done. Sonia Gandhi needs to break the deadlock urgently.

Indonesia rediscovers the Faustian bargain of FDI

11 Jun 2012

The central bank is fighting to defend the currency from foreign dismay over shifting policies. Record foreign direct investment is a vote of confidence, but does not confer carte blanche. Big inflows actually make Indonesia more, not less, susceptible to foreign mood swings.