Asia-Pacific

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.

China’s car surplus should worry global giants

13 Jan 2012

Auto sales by volume grew at the slowest pace in 10 years in 2011. Gridlocks and pollution limit demand potential at home. But ambitious manufacturers are unlikely to down tools. Soon Western carmakers may have to deal with keener and stronger Chinese exporters.

Build cost inflation threatens new gas economics

13 Jan 2012

Australia’s latest liquid natural gas mega-project will cost 70 pct more than initially envisaged. The French and Japanese backers should still be able to justify the $34 billion price. But cost inflation makes life more difficult for U.S. groups planning big LNG export facilities.

Predictions 2012: Upside down and inside out

12 Jan 2012

Planet finance has a propensity to turn itself upside down and inside out. It’s up to its old tricks again. A new collection of commentaries from Breakingviews sets the financial agenda for the next 12 months.

China will fudge Iran oil sanctions

12 Jan 2012

Simple disobedience of the U.S. freeze would give China cheap oil, but it can’t afford the cost of angering Uncle Sam. Total obedience would push up prices, and could spark social unrest in China. But Beijing can probably find a middle way: do just enough to placate the Americans.

Ferretti’s yachts find fitting berth in China

12 Jan 2012

The luxury yacht-maker embodies modern finance’s turbocharged highs and lows. Buoyed by the rise of the super-rich, it made one buyout house a fortune, then helped sink another. Ferretti is now being sold to a state-backed Chinese group for around a fifth of its peak valuation.

Asia’s MDs lose their pink-slip immunity

11 Jan 2012

BofA’s cull of over a dozen high-ranking bankers in the region partly reflects unique problems. But rivals also want to cut costs as well as headcount, making seniority no safeguard. As Asian fees fall, only those with strong cash engines can hang on and hope the cycle turns.

China’s likely finmin choice a win for reformists

11 Jan 2012

Lou Jiwei could be a good choice to run the finance ministry. As head of sovereign fund CIC, he has rare experience of global finance, and has been vocal about fiscal and other changes. A step up would strengthen the reformist streak in China’s consensus-driven political machine.

Loss of Bhattal may signal Nomura retreat

10 Jan 2012

The retirement of ex-Lehman banker Jesse Bhattal, a year after being promoted to the top job, curtails the Japanese firm’s quest to be a globally relevant investment bank. Weak markets and the unexpected resilience of bulge-bracket rivals presented Bhattal with a Herculean task.

Taiwan voters should focus on growth, not China

10 Jan 2012

A second term for President Ma Ying-jeou may push Taiwan faster towards its giant neighbour. But flagging exports are more pressing. With only Ma likely to spend what it takes to perk up growth, a decisive victory for his party in elections on Jan. 14 would be best for the economy.

Shale oil set to take edge off crude price

9 Jan 2012

Gas from shale has flooded the U.S. market, providing 20 pct of supply and squashing prices. Rock-derived oil, by contrast, may add only about 4.5 pct to global supply by 2020. But that would still cover the expected rise in Chinese demand and help keep a lid on crude inflation.

"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.