Asia-Pacific

Unravelling India, Part 3: Demography

20 Jan 2012

It’s common in India to say that, even if the country suffers from short-term political paralysis, the long-term growth prospects are great because of its burgeoning population. But is that really so?

Next World Bank chief is easy to find

19 Jan 2012

He already has the job. Though a news report says the White House is considering Larry Summers and others to run the agency, there’s no reason to replace Robert Zoellick when his term ends in June. He has shown a flair for fundraising, diplomatic skill and economic prescience.

Sahara’s judgment day beckons for 23 mln savers

19 Jan 2012

There’s a lot riding on the $5.5 bln case against India’s Sahara group which reaches the Supreme Court this week. Regardless of the outcome, the amount of cash raised and the vast number of investors involved mean confidence in India’s financial system is at stake.

China urbanises in its own not-so-great way

19 Jan 2012

Over half the Middle Kingdom’s population now lives in cities, up from a quarter in 1990. It’s the way of the world, and basically welcome. China’s tight state control and rapid growth have made the transition less chaotic than in many countries, but no more just or liberating.

China’s testosterone economy may worry world

19 Jan 2012

Tucked away in its GDP figures, China revealed that last year 118 boys were born for every 100 girls. That adds to a horde of 34 million unattachable males. It might give a spur to growth in the short term. Further out, China’s excess of boys may create a more unstable world.

Unravelling India, Part 2: Corruption

19 Jan 2012

What’s the best way for India to slay corruption: punish the culprits or make government so transparent that it is hard for bribery to find places to latch onto in the first place? The answer is both.

IMF’s $500 bln funding request looks ambitious

18 Jan 2012

The Washington lender had no trouble in trebling its funding from anxious member nations after the 2008 crisis. But pulling in another half trillion dollars now may not be so easy. Extra funding from the U.S. will be a tough political sell and the likes of China remain cautious.

Ambani brothers’ mixed fortunes tell same story

18 Jan 2012

Both tales tell the same story of declining opportunities for investment in India. Mukesh may be cash rich while Anil is in stark need of funding. Some think that has the making of reconciliation. That’s unlikely. Mukesh would rather buy his own shares than those of his brother.

Samsung’s $41 bln binge may shake Apple’s tree

18 Jan 2012

At least half of the Korean conglomerate’s planned investment will probably go to expanding its global lead in smartphones and the electronics inside them. It’s a bold bet in a slowdown, but Samsung’s record is good. This may lengthen the company’s lead over its chief U.S. rival.

Global inflation falls – and the global economy?

18 Jan 2012

Inflation is down from China to the UK. The pleasing fall comes with unwelcome signs of weaker growth and trade. The Baltic Dry Index of sea freight is close to a three-year low. The fear is of another global downturn. There are dangers but healthy rebalancing may be taking place.

Unravelling India: Part 1

18 Jan 2012

India is wasting a good economic crisis. Key reforms tend to follow economic slowdowns. Not this time. Instead of springing into action, the political system is paralysed. The best it can offer are handouts and subsidies, which will further exacerbate the country’s problems.

Yang’s goodbye finally frees Yahoo

17 Jan 2012

The Internet firm’s co-founder has quit its board and those of valuable Asian properties. That gives Scott Thompson, the new CEO, fresh flexibility. Yang once got in the way of a high-priced sale to Microsoft; disposal or dismemberment of Yahoo is now that much more likely.

Softly way on Indian governance may pay for T. Rowe

17 Jan 2012

T. Rowe Price of the U.S. has 26 pct of UTI, the Indian fund manager. But it can’t seem to agree with co-owners about who should run the business. New Delhi may want its say too. There’s talk of sticky rifts but the best way forward might be to embrace firm-but-quiet compromise.

Japan makes better hangar for RBS air unit

17 Jan 2012

Selling its aircraft leasing arm to Sumitomo of Japan for $7.3 bln frees up vital capital for the UK lender at a good price. It’s better yet for the buyer, which has low funding costs, a strong yen and needs to diversify. If only divestments were always so easy.

Inflation risks lurk in China’s stronger growth

17 Jan 2012

Last quarter’s 9 percent annual GDP growth rate was a nice recovery from two weaker periods. Industrial production and retail sales rose at a faster clip in December. Stronger growth makes a hard landing less likely, but excessive policy easing could spur unwanted inflation.

India’s Reliance on Chinese cash comes with risks

17 Jan 2012

India Inc is feeling the pinch as dollar liquidity dries up. With EU banks retrenching, Asian competitors are picking up the slack. It’s nice to have options but Chinese funding is still seen as a last resort. Politically hard to swallow, it often comes with strings attached.

HK’s dimsum bonds no longer too hot to eat

17 Jan 2012

Yields of yuan bonds in Hong Kong have risen to a year-high, as investors now expect to gain less from the currency. But a less frothy market attracts more quality investors. Development of the swap market helps make dimsums a viable funding alternative for multinationals.

London could give yuan trading too big a bang

16 Jan 2012

The City’s financial innovators may soon get the chance to run wild with China’s partially convertible currency. That would boost its profile as an alternative to the dollar. But Beijing may prove reluctant to give it the freedom it needs to fly.

China’s $100 bln missing reserves look ominous

16 Jan 2012

Poor-performing European investments caused some of the unexplained decline in the foreign reserves pile in the fourth quarter. But over half of it looks like money leaving the country. The exit of hot money is welcome. Genuine capital flight would be another story.

Philippines investment story turns a corner

16 Jan 2012

It was once the sick man of Asia. But inflows from foreign workers and investors have pushed Philippine stocks up, and borrowing costs to multi-year lows. The Philippines isn’t immune to euro risk, but private investment in infrastructure should help create sustainable growth.