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Wednesday, 16 April 2014

BREAKINGVIEWS

Customers shop for groceries at a Tesco's supermarket in Maltby, northern England

Tesco promises much but delivery is doubtful

16 April 2014

Phil Clarke, CEO of Britain’s largest grocer, touts a “big and bold plan.” He needs one, given poor trading and intensifying competition. But his proposals are vague, and he’s been too timid before. Tesco’s beaten-up shares bounced. But investors should stay sceptical.

Brady W. Dougan, CEO of Credit Suisse

Credit Suisse still firing on one cylinder

16 April 2014

The Swiss lender’s private banking arm is pulling in more money. But a 11 pct year-on-year dip in quarterly investment banking revenue suggests Credit Suisse’s other main engine isn’t motoring. Paring back further in fixed income would be one way to get things moving.

A man walks past the entrance to the Hong Kong Stock Exchange January 12, 2012.

Hong Kong needs to defend shareholder democracy

16 April 2014

The stock exchange is poised to launch a debate on shareholder voting rights after Alibaba cancelled its listing in the former colony. Dumping “one share, one vote” won’t necessarily attract many new IPOs. But it would undermine Hong Kong’s already shaky corporate governance.

Is this the last time Yahoo's earnings matter?

15 April 2014

The company’s stagnant U.S. business plays second fiddle to its overseas holdings. Yahoo’s 24 pct stake in Alibaba accounts for almost 60 pct of its market value. The Chinese internet giant’s upcoming IPO strips investors of their biggest reason to follow the stock.

A group of workers and labor activists march down West Grand Boulevard as they demand a raise in the minimum wage for fast food workers in Detroit, Michigan May 10, 2013. Hundreds of workers in Detroit walked off the job on Friday temporarily shuttering a

Inflation still the risk in tighter US jobs market

15 April 2014

Wages represent 52 pct of GDP, and until they accelerate inflation won’t take hold. A leading think tank is even still worrying about deflation. But there are early hints that employees are beginning to regain some bargaining power. Higher prices could follow in 2015-16.

A Chinese national flag flutters on the Pearl River near a construction site in Guangzhou, Guangdong province, March 27, 2014.

China’s 7.4 pct growth just enough to save face

16 April 2014

Though it hasn’t been slower since 2009, the pace of expansion in the world’s second-biggest economy is still rapid enough to avert the need for a humiliating stimulus. The big exception is real estate, where some kind of meddling to ease a funding crunch looks unavoidable.

Baidu

China travel merger could mean liftoff for Baidu

16 April 2014

A potential $11 bln tie-up of booking sites Ctrip and Qunar sounds dandy. But the real break may be for search engine Baidu. As Qunar’s biggest shareholder, it could get a first-class seat in the merged duo, with room to take a bigger stake when valuations come back to earth. 

Demonstrators stage a protest near the U.S. Supreme Court building, on the anniversary of the Citizens United decision, in Washington, January 20, 2012. Under the banner 'Occupy the Courts,' organizers expect thousands of people to rally on Friday at 150

Corporate speech ruling deaf to investor concerns

15 April 2014

A U.S. court says a regulation forcing firms to disclose their use of African minerals is unconstitutional. The rule’s merits aside, the opinion weakens the public’s right to good information. Given the Supreme Court’s pro-business tilt, transparency could be in real trouble.

A pro-Russian protester

Ukrainian rate rise is a sign of desperation

15 April 2014

With Russia squeezing an already feeble economy, it will be tough to avoid meltdown. A steep interest rate hike can only delay woes. Since impoverished Kiev cannot count on either citizens ready for huge sacrifices or massive Western financial support, Russia has the upper hand. 

BREAKINGVIEWS TV ON INSIDER

Features

Swaha Pattanaik

The rights and wrongs of high-frequency trading

14 April 2014

Market speed junkies are accused of behaviour akin to front-running, scalping investors, and serving no useful purpose. High-frequency traders say they provide liquidity, drive down costs for everyone, and stop investors being fleeced. Neither side has a monopoly on the truth.

George Hay, Columnist, Breakingviews

How China is stoking London’s housing bubble

14 April 2014

Chinese buyers are a key new factor pushing up the UK capital’s property prices. As Beijing relaxes capital controls, the wall of money could intensify. UK politicians will need to decide whether to protect London’s global financial status, or the citizens who have to live there.

Columns

Andy Mukherjee

India in depth: Modi may as well let states spend

15 April 2014

Empty coffers await the opposition leader who is widely tipped to be the country’s next prime minister. Instead of pursing self-defeating austerity, Narendra Modi could pass on more federal spending budget to India’s states. Their expenditure produces three times more output.

Hugo Dixon

Hugo Dixon: How Greece can turn vice to virtue

14 April 2014

The vicious cycle of two years ago is turning virtuous – see Athens’ return to the bond market last week. More can be done to maintain momentum, especially rooting out vested interests. As ever, the weak spot is politics.