Asia-Pacific

China has too many graduates, not enough workers

13 Sep 2011

Supply of college graduates in China far exceeds demand. Blue collar workers are much less plentiful. Beijing is right to invest in human capital but university expansion has caused distortions in the job market. It needs to work on the imbalances created.

Jingdong IPO tests U.S. appetite for China stocks

8 Sep 2011

The Amazon lookalike, unknown outside China, hopes to raise up to $5 billion in a U.S. listing. Jingdong’s scale and growth speed are exciting. But rising doubts about Chinese Internet darlings will test demand. It is a bold bet in a tough market.

China’s hidden debt undermines its sermons

8 Sep 2011

The government’s stated debt is just 15 percent of GDP. But a gaping pension hole and heavy borrowing by state-backed entities could leave Beijing on the hook for debts closer to 130 percent of GDP. That makes China’s preaching over profligate American ways ring a bit hollow.

Stated numbers don’t tell China’s inflation story

8 Sep 2011

Consumer prices rose 6 percent in August, official statistics are likely to say. But like most Chinese data, that’s a guide not a fact. For savers, inflation probably feels higher. Depositors and politicians are worried. Investors cannot afford to be complacent.

Asian bonds offer new-style refuge in market panic

5 Sep 2011

If markets swoon anew, as negative economic signals suggests they might, Asian bonds and CDS both stand to gain ground. In the past, the two have moved in opposite directions. Their altered relationship offers a handy storm shelter for investors while it persists.

China small-stock boom puts big banks in the cold

2 Sep 2011

The likes of CICC and Goldman Sachs have dropped off China’s IPO league tables. A shift to second-tier stock markets favours nimbler and smaller underwriters. With Shenzhen’s boards raising twice what the main Shanghai exchange did this year, the big guys must adjust.

Japan’s LCD bailout puts state in reformist role

1 Sep 2011

Its big manufacturers have long placed job security over profits. So Tokyo has devised a face-saving way for Hitachi, Sony and Toshiba to spin off their ailing LCD units. A state-funded joint venture subsidizes R&D - and the social cost of consolidation that companies fear most.

Shadow banking in China needs restraint

1 Sep 2011

Banks in China may be lending hand over fist, but they’re not alone. Companies, ill-understood trusts and even individuals have pushed credit growth to more than double Beijing’s official target. Reining in this lending will be painful but it would be worse to let it run riot.

China’s new M&A rules may hurt its Internet stars

31 Aug 2011

A freshened regulatory framework adds clarity to the way China treats stock listings and takeovers. But mainland Internet firms which raise money overseas may have to change if they want to be listed at home, or even to secure their domestic operating licenses.

CCB sale underlines BofA’s slow road to recovery

30 Aug 2011

Offloading some $8 bln of the Chinese bank’s shares is a double boost to capital. Along with Buffett’s investment and future earnings, it should help put BofA back on track. But none offers a quick fix. Economic and mortgage woes will leave shareholders dangling for some time.

Temasek’s smart CCB trade may have strategic costs

30 Aug 2011

Singapore’s state investment fund is buying shares in China Construction Bank from Bank of America - at a valuation 21 pct below where it dumped the stock last month. That has financial logic. But it may look too clever for Beijing, and hurt Temasek’s access to deals in China.

South Korean equities offer bargains for optimists

30 Aug 2011

Its stocks dived 21 percent this month as leveraged bets soured. Now they look cheap. Big names such as Samsung Electronics trade below 10 times projected earnings. High debt will keep things volatile, but investors sanguine about global growth may want to revisit Seoul.

Take Chinese bank earnings with a pinch of salt

26 Aug 2011

Bad loans are falling, capital buffers look healthy and earnings are shooting ahead - so why have China’s bank valuations fallen so far? Look deeper and there are signs that a slowing economy is hurting, potential problems lurk off the books, and small banks are struggling.

Japan’s DPJ should choose the least popular leader

26 Aug 2011

The party’s leading candidates to take over as prime minister are competing to avoid the unpopular policies of tax hikes to fund reconstruction and draconian spending cuts. But with debt at 200 pct of GDP and another Moody’s downgrade, it’s time for a grown-up to take charge.

Foster’s comeback to SAB bid just a sharpener

23 Aug 2011

The Aussie brewer promised shareholders an A$500 million payout. That was enough to nudge its shares past SAB’s hostile offer, but is less than it can afford. With SAB yet to make a formal bid, Foster’s has left itself plenty of room for something stronger later.

China’s bank rules promise safety, not stability

19 Aug 2011

Lenders will end up well padded against bad debts under new plans - a good job, since lots are coming. But the distortions that promote risky lending remain. With capital scarce, banks may also push more loans through China’s worryingly large “shadow” banking system.

Baidu smear campaign can’t be brushed aside

18 Aug 2011

Critical reports by Chinese state TV have knocked 9 percent off the dotcom giant’s shares. It may be professional envy rather than political conspiracy. Still, the Communist Party’s relationship with the web is fractious. And Baidu’s ownership structure may be an Achilles’ heel.

SAB may yet brew up friendly Foster’s takeover

17 Aug 2011

The UK-listed brewer is canny to go hostile with an unchanged $10 billion bid days ahead of its Aussie target’s results. Peace may yet break out. Hostile takeovers are hard Down Under, and Foster’s has no white knight. With a small sweetener, both sides may get what they want.

India’s botched crackdown may be turning point

17 Aug 2011

Arresting an anti-corruption hunger striker has cost the Singh government political capital. That could jeopardise reforms hanging in the balance, and may worsen supply bottlenecks and inflation. But it could also be a spur to tougher action on graft - another big economic drag.

Solar firm’s demise signals gray industry forecast

16 Aug 2011

Onetime investor darling Evergreen Solar, among the first U.S. green energy companies to go public, just went bankrupt, victimized by a global supply glut. Growing Chinese competition and waning European subsidies mean the solar sector will probably get darker before the dawn.