Asia-Pacific

Oil trader, stock investor variance is opportunity

10 Oct 2011

Economic fear has taken a heavier toll on U.S. oil company shares than on crude itself. Either there are bargains among the stocks of oil explorers, or commodity investors are too bullish. The difference of opinion ought to mean there’s room to make money.

China’s bank intervention is a Band-Aid at best

10 Oct 2011

Buying shares of ICBC and its peers in the market sends a signal the government will stand behind its lenders. Cracks in the property market and non-bank lending suggest it may be necessary. The move should reassure depositors, but won’t spare banks from the trouble that looms.

India telecoms policy mixed bag for operators

10 Oct 2011

The scandal-ridden sector is crying out for consolidation. Delhi’s new policy will allow spectrum trading and, theoretically, free up M&A too. But costs will rise and takeovers are unlikely until the corruption investigations are complete.

Sinopec shows quirks of Chinese resource M&A

10 Oct 2011

The Chinese energy group has offered a massive 120 pct premium for Canadian producer Daylight. Like similar Chinese deals, the $2.2 bln offer works because of strategic necessity, still-high commodity prices, cheap capital and a shareholder none too fussed about value creation.

Trouble knocks for Korea’s indebted households

7 Oct 2011

Seoul has resumed crisis meetings over Europe’s debt drama. Banks and the government itself look sturdy enough, but households are deep in debt, and the foreign inflows that kept loans cheap are fleeing. Korea still has strong finances, but it may need them if defaults spike.

China Mobile’s cash pile is a $50 bln dilemma

6 Oct 2011

The Chinese telecom has more cash than Apple, but few ways to spend it. There are no logical acquisition targets, and state ownership makes it tricky to buy back shares. The best bet may be to invest in growth. Future profits may suffer as competition from the Internet heats up.

Essar’s better prepared for a second UK IPO

6 Oct 2011

India’s Essar is considering a UK listing for its infrastructure assets. With one London IPO under its belt, and lessons on governance from that experience still fresh, it should be better prepared this time around. Now there’s the small issue of timing.

Trade war remains a distant prospect

5 Oct 2011

The U.S. and China are once again raising the spectre of mutually destructive protectionism. But globalisation has gone so far that trade restrictions would have painful and immediate consequences in every country. That’s why the threats won’t go far beyond angry skirmishes.

Ambani’s challenges don’t end with 2G saga

4 Oct 2011

Anil Ambani will be relieved that investigators haven’t uncovered any evidence implicating him in one aspect of the 2G telecoms scandal. But he shouldn’t be complacent. His telecoms firm is struggling to keep pace with its rivals. It would be better if it was taken over.

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.