Asia-Pacific

Tough markets prompt Nomura soul-searching

1 Nov 2011

After a $589 million quarterly loss, the Japanese group is shrinking its investment bank. It’s not alone. But unlike peers, Nomura was sub-scale to begin with. Without a sustained market recovery, it is hard to see how Nomura’s global ambitions can survive.

New Delhi’s fiscal profligacy starts to bite

1 Nov 2011

India is set to bust its fiscal deficit/GDP target. Half way through the year, it has used two-thirds of the sums set aside. With inflation close to 10 percent and growth sluggish, there is an urgent need for the government to get a grip of public spending.

Japan acts alone in global financial mess

31 Oct 2011

Monday’s unilateral effort to keep the yen from rising will probably work as well as the last one – not very much. Tokyo can’t easily resist the pressure from foreigners fleeing troubled currencies. The G20 could move the world towards financial balance, but won’t try hard soon.

China’s regulatory reshuffle avoids real change

31 Oct 2011

Three retiring top financial regulators have been swapped with former bank heads, trained for life in the system. Overlapping roles mean their powers will be constrained. It suggests China’s banks won’t get the sweeping reforms they need.

India’s anti-graft movement has life after Anna

28 Oct 2011

Anna Hazare’s anti-corruption campaign is imploding. There are differences between the group’s leaders, and allegations of financial irregularities. But whatever happens to Team Anna, there are signs that the movement he has come to embody will have a life of its own.

Sahara’s $5 bln savings spat is India’s loss

28 Oct 2011

The Indian savings house has been ordered to return a whopping $4.9 bln raised from nearly 30 million mostly rural investors. The episode is unlikely to help confidence among small savers. Yet accessing their capital is vital to help India’s development.

Pitching in on Europe is in China’s best interest

27 Oct 2011

China has suggested a contribution to Europe’s bailout would come with strings. But as a beneficiary of global trade, the world’s number two economy has good reason to do whatever it takes to secure a stable euro zone. That would also spare China a rapid and painful adjustment.

Chinese censorship runs on greed more than fear

27 Oct 2011

After a series of PR fumbles and web-inspired protests, the authorities are stepping up Internet controls. Rumour-mongers are even being arrested. Yet many of these curbs depend on companies and investors playing along. While growth is rapid, greed motivates more than fear.

China’s irate homebuyers foretell mess to come

26 Oct 2011

Property developer Longfor drew an angry mob after it seemed to cut prices on new Shanghai apartments by 25 percent. Though prices aren’t yet plunging across the country, it’s looking increasingly likely that they will. Angry scenes will become more common.

Boardroom rejig still leaves Olympus adrift

26 Oct 2011

The Japanese camera-maker, racked by accusations from its ousted CEO, has sidelined its 70-year-old chairman. But Kikukawa will stay on the board, along with 13 other former Olympus managers. Shareholders need to call for new blood to put the rudderless company back on course.

ArcelorMittal chickens out to hoard its cash

25 Oct 2011

The world’s largest steelmaker abruptly bailed on a joint takeover of Australia’s Macarthur Coal, selling out to partner Peabody, as investors tendered their shares with unexpected alacrity. It may be a sensible move, but it certainly makes the billionaire Mittals look a nervy bunch.

Pfizer milk bid could fortify China’s M&A hopes

25 Oct 2011

Mengniu Dairy’s bid for the U.S. pharma giant’s $10 bln nutrition unit would make strategic sense. China can gain from deals pegged on rising consumer demand rather than cheap labour. Buying foreign brands may also help address food safety problems, if bidders tread carefully.

India’s inflation fight lacks credibility

25 Oct 2011

The central bank’s latest rate hike won’t tame stubborn inflation of over 9 percent. The urgent task now is to reduce expectations of more price increases with a more explicit inflation target. It might mean GDP slows a bit, but that’s an acceptable price to pay.

Olympus scandal wakens Japan’s sleeping investors

21 Oct 2011

Nippon Life has joined foreign investors asking the company to clear up accusations by its ousted CEO. Growing outlays for Japan’s aging society are turning once passive insurers into activist shareholders. If only its banks, who are even bigger investors, would get on board.

Olympus’s M&A moves went from unorthodox to mad

21 Oct 2011

The Japanese firm’s merger misadventure started oddly and went downhill. Deals don’t always require big banks or cash fees. But Olympus seemingly ceded most of a UK target’s future profits to a mystery adviser, resulting in the biggest M&A fee in history. At best, that’s crazy.

China best to keep cool head over yuan bill

21 Oct 2011

Beijing has hit out over a mooted U.S. currency bill that could lead to tariffs. China is getting more assertive, and can no longer rely on U.S. firms to fight its corner. But starting a war of words may alienate its remaining supporters, and make the bill more likely to pass.

Delhi has home-grown options to tackle slowdown

20 Oct 2011

India’s finance minister says that economic growth will fall below 8 percent this year. He blamed global turbulence. External factors do hurt, but India can reinvigorate itself with domestic structural reform. The key is to spur business investment.

Temasek’s StanChart bond looks too clever by half

19 Oct 2011

The Singaporean fund issued a zero-yield bond exchangeable into shares of the emerging market lender. If they rise less than 27 pct, Temasek will have borrowed $512 mln for free. But the ensuing fall in the shares means the gains from this wheeze have already been wiped out.

Olympus investors need urgent answers

19 Oct 2011

Accusations by its ousted CEO have them wondering: why did the Japanese company pay two M&A advisers a 35 percent commission in 2008? The fear is that Olympus could be forced to take big writedowns, or even delist. Until the air is cleared, its shares will continue to founder.

India-Pakistan trade deal just a first step

18 Oct 2011

Likely trade liberalisation between the two traditionally hostile nations has been rightly called historic. It’s part of India’s attempt at more economic engagement with its neighbours. The whole region will benefit, but current trade is so meagre that progress will take years.