Yahoo could find closure by way of Chinese bid 3 Oct 2011 Talk that Alibaba founder Jack Ma might buy Yahoo outright sounds like overkill: what he really wants is the 40 pct of his company Yahoo owns. But if U.S. regulators can stomach it, a Ma-led buyout and break-up of the search engine would be a neat solution to Yahoo’s woes.
Run of economic bad news could be about to pause 3 Oct 2011 If Friday’s U.S. jobs report follows a recent mini-trend, it will be time to revise economic expectations upwards, once more. But a downward turn will follow soon, unless global financial tensions ease durably. For rich countries, this “lesser depression” may have years to run.
U.S. currency slap looms as China least deserves it 3 Oct 2011 A bill enabling sanctions on Chinese goods may pass the Senate this week, even though the yuan has appreciated strongly on a trade-weighted basis. China’s central bank has been guiding the currency stronger despite falling markets. For the U.S. to lash out now looks a mistake.
LSE-SGX move on metals exchange would make sense 30 Sep 2011 Joint bids tend to be hard. But the London and Singapore bourses may benefit by partnering in a possible $1.6 bln bid for London’s metals exchange. LSE gets a partner that already handles metals futures; SGX gets local know-how. That matters in a potentially hot auction.
India should step up privatisation 29 Sep 2011 New Delhi’s surprise rise in its borrowing target provides the perfect excuse to push harder on selling stakes in state companies. Market conditions aren’t great but, given the benefits to the economy of less state ownership, India should sell at almost any price.
Currency crossfire to hit emerging economies hard 29 Sep 2011 Money is flowing out of emerging economies. Countries that had complained about currency appreciation have had to prop up forex rates. Turkey and South Korea are vulnerable to hot money retreat. Poland and Hungary are caught in currency traps.
Tata’s Jaguar Land Rover journey needs direction 29 Sep 2011 Tata Motors is in no rush to replace its CEO, who stepped down on Sept. 9. It is not the only gap at India’s largest auto maker. Shares in the firm, which also owns Jaguar and Land Rover, trade at a big discount to peers. A new CEO might find value with more business integration.
Turmoil leaves Asia Pacific facing dollar drought 28 Sep 2011 Strong government finances and exports in the region aren’t enough to offset the reversal of Western investment. While some countries can draw on huge reserves, others like South Korea and Australia are facing a dollar shortage and potentially destabilizing currency declines.
China’s property market faces crisis of trust 27 Sep 2011 Hangzhou developer Greentown is under scrutiny for using trust structures to funnel debt into its projects. Trusts have spread rapidly to become a critical source of funding for property companies. But a crisis of cash flow, or confidence, could see a messy unravelling.
Rise of red capitalists need not be bad for China 27 Sep 2011 China’s richest man, Liang Wengen, may get a seat on the Communist Party’s elite central committee. It smells of crony capitalism, but there could be advantages to giving the private sector a bigger role in government. This may even help China nurture entrepreneurship.
Time to close China’s VIE loophole 26 Sep 2011 No-one benefits from the fuzziness around the VIE, a structure that lets foreigners take quasi-ownership of Chinese companies in restricted sectors like the web. Their usage is spreading. VIEs make regulators look weak, and investors risk losing their shirts. Clarity is needed.
Offshore yuan investors get a rude awakening 23 Sep 2011 Chinese currency traded in Hong Kong fell sharply. Yet the onshore yuan, protected by China’s capital controls, barely moved. Investors may not have expected offshore to behave just like another Asian currency. This may pour cold water on the offshore market’s rapid development.
Indonesia holds door open for fleeing foreigners 22 Sep 2011 As investors drove the main index down 9 percent, authorities sold dollars to smooth their exit, resisting the urge to prop up stocks. That’s smart. The panic is more about Europe and the U.S. than Indonesia. Other hot-money havens like Australia and India may face similar tests.
Bring back Manmohan Singh 22 Sep 2011 Anna Hazare’s anti-corruption campaign should be a wake-up call to Prime Minister Singh who has lost touch with India’s growing middle classes. One way to reconnect is to revive the vigour for economic reform which characterised Singh’s tenure as finance minister in the 1990s.
IMF issues timely warning on ultra-low rates 21 Sep 2011 Just as Ben Bernanke and his crew contemplate further easing, a new IMF report lays out the multiple threats created by such loose monetary policy. In rich nations, small firms suffer while in emerging markets, capital inflows produce bubble conditions. The FOMC should pay heed.
IMF financial crisis indicator bodes ill for China 21 Sep 2011 The fund has found a measure of credit growth that could predict crunches. It makes the Middle Kingdom look precarious and heralds problems for Turkey and Vietnam. The IMF’s crisis-spotting record is lousy. But overheating nations shouldn’t dismiss what seems a sensible metric.
Foster’s gets full measure from SABMiller 21 Sep 2011 Boozy rows between the Australian and UK brewers are history. Like most hostile M&A, this has turned friendly with a sweetener from SAB. Torrid markets and the absence of rival bidders mean Foster’s has done especially well to extract a punchy $10 bln-plus cash offer.
Singapore not quite helpless over UBS losses 21 Sep 2011 The city state’s sovereign fund is understandably disappointed with its investment in the Swiss bank. The 6.5 pct stake may still come good, especially if UBS directs future business to Singapore. Even so, GIC may want to rethink the wisdom of being a purely passive shareholder.
Lack of liquidity sucks safety from Asian havens 21 Sep 2011 Asia’s failure to develop larger securities markets is coming home to roost. Investors are beating a path for exits despite the region’s relatively strong finances. Their fear: a retreat by European investors could leave them marooned, unable to cash out without rocking prices.
China’s pursuit of stability risks greater stress 20 Sep 2011 Some claim China’s economy is a bubble set to burst while others think slowing growth and inflation warrant looser policy. Ethan Devine of Indus Capital argues that in fact China’s economy is both too hot and too cold, with structural reforms needed to bring it back into balance.