Government & Agencies

China property’s Enron damp squib may yet surprise

19 Mar 2024

Markets shrugged as a watchdog accused Evergrande of inflating sales by $78 bln over a two-year period. The US firm’s 2001 demise, by contrast, had broad impacts. More fallout in China is likely, potentially ensnaring banks and auditors like PwC. Investors are too sanguine.

UK media muddle is fresh turn-off for foreign cash

14 Mar 2024

Hurried Westminster amendments are set to block an Abu Dhabi-backed bid to buy the Telegraph. It’s OK to stop foreign states owning domestic media, and it may not even upend UAE relations. But making policy on the hoof so flagrantly offers a new reason to swerve UK assets.

ByteDance’s TikTok woes are never-ending sideshow

14 Mar 2024

US lawmakers edged closer to banning the short-video app. Co-founder and CEO Liang Rubo has grappled with the epic four-year-long fight while rejigging the business at home to focus on e-commerce. ByteDance remains in IPO limbo but its fortunes have not fallen too far.

EU’s spending snags spoil joint borrowing success

12 Mar 2024

Europe’s 800 bln euro stimulus plan is stuck. The bonds that finance it sell like hotcakes, but so far it has paid out only 225 bln euros as countries struggle with projects. Unless the bloc can show it can use the money it raises from investors, it will lose much-needed funds.

Escaping Hong Kong’s value trap is far from cheap

12 Mar 2024

L'Occitane, Samsonite and ESR may be buyout targets as stocks languish in the financial hub. These businesses are broadly doing well and could command a higher multiple on another bourse now or later. That means shareholders can demand a generous premium from any buyer.

Korea Inc’s Japan makeover only scratches surface

12 Mar 2024

South Korea is copying its neighbour's corporate reform drive to lift anaemic valuations. But voluntary disclosures and tax breaks are unlikely to spur change among chaebol like Samsung which dominate the $1.9 trln stock market. Seoul's push requires more stick than carrot.

IMF’s Egypt bailout chooses hope over experience

11 Mar 2024

Cairo has received an $8 bln IMF loan after a $35 bln cash injection from the United Arab Emirates. If President Sisi does not justify the Fund’s optimism about reforms, a painful restructuring of the $165 bln external debt lies ahead.

China can afford to holster monetary bazooka

11 Mar 2024

Consumer prices rose 0.7% in February, the most in nearly a year but far below Beijing’s 3% target. Still, the central bank's piecemeal easing is starting to add up. Expected US rate cuts will make it easier for China to stimulate the economy and avoid a deflationary doom loop.

Biden’s imperfect pitch is pleasantly concrete

8 Mar 2024

The US president made a strong case in his annual address that his tenure saved the economy. Distinctly Democratic initiatives were surprisingly effective, but the next four years may leave less in any president’s control. At the very least, Biden has set the terms of the debate.

American healthcare is a perfect cyber-hostage

7 Mar 2024

A hack at the biggest processor of insurance claims snarled billions of dollars of payments to US hospitals. The healthcare system’s interdependent web of middlemen means none can be allowed to fail, making it an ever-more-obvious target for the growing onslaught of ransomware.

A year on, SVB’s killer is still at large

7 Mar 2024

Twelve months after Silicon Valley Bank’s demise, investors worry more about real estate than flighty depositors. The disjointed system that enabled a crisis remains intact, though, with patchy oversight, incomplete safety nets and ambiguity over who loses if a lender fails.

UK ‘non-dom’ slap is right move for wrong reason

6 Mar 2024

Finance minister Jeremy Hunt scrapped tax benefits for people living in the UK but officially domiciled abroad. That improves fiscal fairness and may raise over $3 bln per year. But the benefits are uncertain and the funds went to pre-election giveaways, not public services.

Taylor Swift is Thai economy’s antihero

6 Mar 2024

Singapore's exclusive deal to host the pop star's Southeast Asia concerts has irked its neighbours. Thailand, with the slowest post-pandemic recovery, is upset at missing out on the spoils. Those are debatable and in any event wouldn't shake off the $500 bln economy's malaise.

China Vanke looks too favoured to fail

6 Mar 2024

Investors are dumping the $14 bln developer’s bonds and stock on reports it wants to extend its debt. The firm says it can repay $630 mln due next week. And crucially, it has the effective backing of the Shenzhen government. Letting Vanke go under would send markets into a panic.

White House race puts lots of fine print at stake

5 Mar 2024

Super Tuesday contests may solidify former President Trump’s shot at a 2020 rematch. November’s ballot will decide not just big-picture issues, but a host of smaller tweaks – like financial or climate rules – where a victorious Trump could roll back President Joe Biden’s legacy.

Kyiv’s defence requires European supply-side shock

5 Mar 2024

Europe is not producing the 2 mln artillery shells Ukraine needs, and missile plants are idle. Meanwhile, its stockpiles are shrinking, threatening the region’s ability to defend itself. To crank up production lines, manufacturers will need a steady flow of government orders.

How to solve Europe’s defence riddle

5 Mar 2024

At 360 bln euros, the bloc’s military expenses are three times Russia’s. Yet fragmented defence systems are a problem, Bruegel senior fellow Guntram Wolff tells The Exchange podcast. To improve scale and boost aid for Ukraine, Europe should consider more joint debt.

Excessive UK tax giveaways risk longer-term harm

5 Mar 2024

Finance minister Jeremy Hunt may spend some 15 bln pounds in pre-election fiscal gifts in Wednesday’s budget. He could be tempted to do more – and make life difficult for the next government – by further cutting public services. But that would put the country in a bind.

China’s financial clout will be hard to reverse

4 Mar 2024

Exports from the People’s Republic upended the world economy. Its $4.3 trln hoard of foreign assets is doing the same for global finance. As with trade, winding back the clock will not work. Multilateral problems require multilateral solutions.

EIB backing would add spark to EU mini-nuclear bid

1 Mar 2024

Europe’s bid to develop smaller, cheaper nuclear reactors as part of its plan to cut carbon emissions needs cash and political support. European Investment Bank financing for next-generation projects would make a difference. Even so, green benefits may take years to materialise.