Politics

Macron faces stronger Merkel after state election

15 May 2017

France’s new president needs German support for his euro zone reform ideas. Angela Merkel’s challenger Martin Schulz is more supportive of tighter fiscal integration and more investment. The triumph for Merkel’s party in a regional poll suggests any changes will need her consent.

Britain gears up for immigration self-harm

15 May 2017

Theresa May is likely to stick with a vow to reduce annual net migration below 100,000, despite failing to hit it so far. The election gives the prime minister a golden opportunity to show the UK will keep growing post-Brexit. Renewing the pledge would apply an unhelpful brake.

India’s Narendra Modi has many stripes

15 May 2017

The prime minister enjoys huge support for his bid to clean up the country. But he now looks more populist than pro-market – and in no hurry to push through difficult reforms. Modi is unpredictable and it is not clear what tops his agenda: development, Hinduism, or power itself.

China’s dealmakers edge out Trump in first round

12 May 2017

American cattlemen and financiers will get more access to mainland markets in exchange for chicken imports and a potential opening for Chinese banks. It's a good start but Beijing didn't give up much. U.S. negotiators will have to push harder if they want a better bargain.

Macron inherits healthy economy – and will need it

12 May 2017

The French president-elect is taking over at a propitious time. Growth is picking up, unemployment has probably peaked and the budget deficit is expected to fall under the EU limit for the first time in a decade this year. That gives him some scope to sweeten unpalatable reforms.

Hong Kong bourse better off without Beijing’s aid

12 May 2017

China could prop up shares before a set-piece presidential visit, a media report says. This is further evidence of Beijing's tightening grip on the city and its belief that market prices are a tool to signal good news. Exporting that attitude will dent Hong Kong's appeal.

Made-in-India market boom has an enduring quality

12 May 2017

Big inflows into domestic mutual funds amid Premier Narendra Modi's corruption crackdown are driving a structural shift in the equity market. That makes stocks less reliant on fickle foreign money. The resulting valuations look rather stretched - but may nonetheless prove sticky.

Cox: Nixon nostalgia missing from stock market

11 May 2017

Trump's sacking of FBI boss Comey has sparked worries about a crisis similar to the one that forced another Republican president out of the White House in 1974. A 40 pct decline in the Dow accompanied that ordeal. Investors don't seem to think history is repeating itself.

Australia hands U.S. timely infrastructure example

11 May 2017

An investor group is paying A$7.6 bln for 50.4 pct of Endeavour Energy, a New South Wales electricity distributor. It's an "asset recycling" model that raises private capital against established operations to fund new government investment. Trump's team should take note.

If Britain cools on markets, others lose too

11 May 2017

The country’s two main political parties are both promising to intervene in high household electricity prices. In energy, market forces haven’t worked as they should. Yet if Britain backs away from its instinct to be mostly hands-off, other countries lose a reason to go forward.

Italian banks offer way to play Macron boost

11 May 2017

Both Credit Agricole and UniCredit beat first-quarter expectations and have more to come. Yet the French bank trades above tangible book value, while its Italian peer languishes. If the new president reforms both France and Europe, UniCredit’s shareholders could get more upside.

Trump’s game-show FBI antics challenge investors

9 May 2017

Director James Comey was fired like a common "Apprentice" contestant, despite the president's recent praise. The timing also is suspect given the agency's probe into the Trump campaign’s Russia ties. Tax cuts have to be revalued by the market if the rule of law is under threat.

Moon win offers South Korea ray of sunlight

9 May 2017

The election of liberal Moon Jae-in to the presidency heralds a softer stance on North Korea and restores domestic stability. That’s welcome. But he will need to unite a polarized nation to succeed where his ousted predecessor failed in resetting South Korea's growth model.

What’s Britain’s real Brexit bill?

9 May 2017

Negotiators may demand the UK pay 100 bln euros as part of an orderly EU exit. Avoiding this would mean leaving without a trade deal, which would hit future growth. This Breakingviews calculator estimates how much output and tax revenue Britain stands to lose in a chaotic Brexit.

Samsung trial tests South Korea’s rule of law

9 May 2017

Bribery charges have turned the group's de facto leader, Jay Y. Lee, into a public enemy. A guilty verdict, if merited, could help rebuild trust in the system after an epic corruption scandal. It is equally important that he gets a fair trial despite the popular outrage.

Italy adds bum note to Macron’s ode to joy

8 May 2017

Emmanuel Macron took the French presidency, but that still leaves Italy as Europe’s other crisis-in-waiting. Elections are coming, disruptive parties are stronger and unemployment higher than in France. Growth-friendly policies and more fiscal leniency could mitigate the risk.

Macron has bigger fish to fry than Brexit

8 May 2017

Negotiating Britain’s exit from the EU will no doubt guzzle the incoming French president’s time and energy. But knitting the euro zone closer together will absorb his political capital. Punishing or pleasing the UK will be an outcome not an objective.

Macron may change France in unintended ways

7 May 2017

Luck as much as talent has propelled Emmanuel Macron to the presidency. He will need both if he wants to achieve more than seeing off the far-right Marine Le Pen. The ex-banker will at best deliver piecemeal reforms. At worst, he risks undermining the Fifth Republic.

Britain’s Brexit bill is worth the money

8 May 2017

An orderly departure from the EU may cost the UK as much as 100 billion euros. A chaotic exit that permanently lowered the growth rate of its 1.9 trillion pound economy would be much more expensive. Better to hand over a hefty sum if it means avoiding that outcome.

Markets call Trump’s war bluff on North Korea

8 May 2017

Investors are ignoring the U.S. president’s war rhetoric against Pyongyang, snapping up South Korean securities and modestly buying protection against default. Optimism over the global economy and a new leader in Seoul result in a mute reaction compared to past flashpoints.