Asia-Pacific

"Tax less, spend less" policy could help China

9 Jan 2012

Beijing takes too big a share of the pie. Fiscal revenue grew by a quarter in 2011. Lower taxes for the poor and retailers can help spur consumption. That may mean Beijing has to spend less on infrastructure, but higher levies on property and resources would help close the gap.

Woodford surrender doesn’t end battle at Olympus

6 Jan 2012

The jilted CEO dropped his bid to retake the helm after failing to win support for a proxy war, and will sue for solace instead. But shareholders still face a fight. If they don’t, Olympus’ banks may muscle the company into a far-from-ideal equity injection from a rival.

For a contrarian bet, try China’s Las Vegas

6 Jan 2012

Macau was a winner in 2011. Gaming revenue grew 42 percent. As China gets richer, so will the garish, casino-filled enclave. An economic slowdown will hit casual gamblers, but high-rollers matter more. Macau will thrive as long China’s inequality and corruption go uncurbed.

China’s lead in patents masks lag in innovation

5 Jan 2012

The rising economic giant probably topped the world as a place to file applications in 2011. But the dodgy quality of many patents and foreign activity contradict the idea of a surge in homegrown ingenuity. As it has in manufacturing, China will catch up - but it’s not there yet.

Short-selling could give China long-term boost

5 Jan 2012

China may bolster short-selling by setting up a new securities lending exchange. More shorts would help curb excessive speculation and rekindle interest in the market. However, since Beijing is likely to remain firmly in control, expect things to move slowly.

Campaign fever to drive Asian economies in 2012

5 Jan 2012

It’s not just the United States: leadership change looms in most of Asia this year, encompassing a third of both the planet’s population and its GDP. Income inequality set the agenda in 2011. Now pro-growth populism is likely to rule instead.

Exxon’s Japan sale may not show downstream doubts

4 Jan 2012

With rivals like Conoco splitting off refining, investors are on the lookout for signs the Texas titan will join the trend. Exxon’s likely $5 bln exit in Japan isn’t a clear one. The group recently sank $25 bln into downstream projects. It may merely be ditching a weak asset.

China’s M&A dragon will blow hot in 2012

4 Jan 2012

Falling prices and tight credit mean state-backed buyers can play to their strengths. Two newly minted oil deals, and Three Gorges’ Portuguese swoop, show Beijing’s burgeoning appetite. Big name bids may follow, while China’s savers and consumers unwittingly foot the bill.

Korean spending spree sets right tone

4 Jan 2012

Seoul plans to blow most of its budget in the first half and is likely to end the year in deficit. It might seem an election-year stunt. But promoting domestic jobs instead of using a weak currency to boost exports is a path the rest of Asia should follow.

China’s growth may dip below 8 percent in 2012

3 Jan 2012

Three things could push the country’s GDP growth to a ten-year low: falling house prices, a slump in property investment, and slowing exports. All will take their toll on consumer confidence. Last time, Beijing stimulated the economy; it can ill afford a second round.

Stock up on gold, tinned food and shotgun shells

30 Dec 2011

OK, there’s no need to be too melodramatic. But hard times bolster the case for hard assets. When protesters fill the streets and the only cure for debt crises is printing money, it’s tempting to head for the hills. Assets offering true security fit in a suitcase.

Beijing will face fresh yuan dilemma

30 Dec 2011

The yuan’s six-year rise is likely to end, if not reverse, in 2012. The trade surplus is shrinking, inflation has eroded the currency’s real value and foreign investors are selling. But the U.S. still wants a revaluation. That would only increase the chance of a hard landing.

Long live gloom – it’s a great time to buy stocks

29 Dec 2011

It’s the oldest saw in the investment handbook: buy low and sell high. But with global shares at their cheapest in a generation, confident investors are a rare breed. If the bad times persist, however, 2012 could be another classic year to accumulate equities.

U.S. protests won’t stop Japan’s yen meddling

28 Dec 2011

The Treasury has rightly criticised Tokyo for weakening the yen. Currency intervention has limited impact, and exporters have learned to live with a strong yen. But fears that traders see the yen as a one-way bet mean more meddling is likely, whether Washington approves or not.

Gandhi-Hazare nexus important to Indian economy

27 Dec 2011

Rahul Gandhi may well succeed his mother Sonia as head of the ruling Congress party in 2012. One challenge is to claim the anti-graft message of Anna Hazare, a follower of the iconic Mahatma, before the opposition does - and harness it to help boost investment and growth.

IMF needs to keep powder dry for usual suspects

23 Dec 2011

The fund is getting an extra $200 bln to aid with the rescue of wealthy Europe. But the downgrade of Hungary’s credit rating is a reminder that there could be more traditional middle-income demands for aid, too. The IMF will have to allocate its growing pot of money carefully.

China firepower pips politics in $3.5 bln EDP win

23 Dec 2011

Portugal has got a neat deal from China’s TGC for 21 pct of its main utility: a top price and a jumbo credit facility. China can press its advantages when it sees strategic value like EDP’s technology and LatAm growth. That mattered more than German lobbying for E.On’s rival bid.

Jack Ma could pay high price to be rid of Yahoo

23 Dec 2011

The Alibaba founder wants to buy back most of Yahoo’s stake in his e-commerce giant. An earlier spat over their payment unit Alipay showed Ma has nuisance value and may deter other bidders. But financing it won’t be easy. After selling at the bottom, he risks paying a peak price.

Oil services outlook firmer than stocks suggest

21 Dec 2011

Halliburton, for one, has lost a third of its value in six months. Yet capital spending by big energy groups, which becomes revenue for services firms, is set to rise to a record $600 bln in 2012 - even if oil prices decline. It’s hard to justify the sector’s low multiples.

Delphi slips Tokio Marine a $2.7 bln spiked cocktail

21 Dec 2011

That’s one explanation for the Japanese insurer’s Godzilla-sized overpayment for the U.S. group. Including a special dividend, it’s paying a near 80 pct premium. It’s another example of Japan Inc throwing shareholders under the bus in the name of international expansion.