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Tuesday, 02 September 2014

BREAKINGVIEWS

Jack Ma, chairman of China's largest e-commerce firm Alibaba Group, attends a corporate event at the company's headquarters on the outskirts of Hangzhou, Zhejiang province April 23, 2013.

Six steps to Alibaba's twelve-figure valuation

02 September 2014

As the Chinese e-commerce giant launches its IPO, investors must decide what the shares are worth. Growth, profitability and stock market multiples are a factor. So are potential new businesses, though shaky governance merits a discount. Breakingviews spells out the key numbers.

Modi

Japan's $34 bln pledge unmasks Modi's growth ploy

02 September 2014

The new Indian leader has bagged a fat five-year investment commitment from his Japanese counterpart. India will buy foreign-made equipment in return for creating local jobs. Japan’s promise will embolden Narendra Modi to look for similar deals with China and others.

European Central Bank (ECB) President Mario Draghi reacts at the monthly ECB news conference in Frankfurt March 6, 2014.

Markets overestimate Draghi's economic powers

01 September 2014

Investors show a touching faith in the ECB president’s ability to boost near-zero inflation. The trust may be misplaced. Mario Draghi’s success in defusing the euro zone crisis relied on his sway over markets. He has less influence over the euro zone economy and governments. 

A man walks past the entrance of the headquarters of Swiss bank Julius Baer in Zurich May 28, 2013.

Credit Suisse/Baer tie-up would have weak logic

01 September 2014

Zurich’s latest parlour game envisages Credit Suisse buying wealth manager Julius Baer. Such a combination would be risky, meshing different banking cultures and systems. It is not clear that the benefits would outweigh the costs. And regulators remain twitchy about big bank M&A.

Pro-democracy protesters hold up their mobile phones during a campaign to kick off the Occupy Central civil disobedience event in front of the financial Central district in Hong Kong August 31, 2014.

Democracy snub leaves Hong Kong only bad choices

01 September 2014

Citizens in the former colony have two options: choose between Beijing-approved chief executive candidates, or don’t vote at all. The new ruling leaves little room for compromise and risks a showdown with protesters. China’s leaders seem to care ever less what the world thinks.

A road sign is seen in front of a sign of Agricultural Bank of China at its branch in Beijing April 23, 2013.

Don't cry for China's pay-capped corporate chiefs

02 September 2014

Plans to cut cash salaries for state sector bosses by up to half may sting. But top executives in effect get another currency – political stock. If China’s ruling party had a share price, it would be rising. The trouble is, outsiders can’t easily see what that stock is worth.

An Islamic State militant

Investors decide not to worry about the world

01 September 2014

The demise of the post-Cold War vision of Europe? Not a big problem, markets say. Nor do investors see the rise of Islamic State, arguably the biggest threat to Middle East peace in decades, as their issue. The financial indifference is defensible, but increasingly precarious.

Gold bars are displayed during a photo opportunity at the Ginza Tanaka store in Tokyo.

Gold’s geopolitical ledge won't hold up

01 September 2014

International tension has helped stabilise the gold price after a 2013 plunge. But the fundamentals are bad. ETF redemptions persist while bar and coin investment has dropped heavily. Jewellery demand remains soft. Consumers want cheaper gold. They are likely to get it next year.  

Qihoo

China tech shows there's value in being number two

01 September 2014

Chipping away at giants like Baidu and Alibaba means finding a niche. The rapid growth of JD, VIPShop, Qihoo, and YY shows there’s room for new models, and foreign investors are happy to fund them. But the line between healthy competition and profit-eroding rivalry is thin.

BREAKINGVIEWS TV ON INSIDER

Columns

Hugo Dixon

Hugo Dixon: EU's three big problems all linked

01 September 2014

The stagnant euro zone economy is one reason the EU is reluctant to take action against Russia. It also increases the risk that Britain will quit the EU - which, in turn, would diminish its power and ability to stand up to Moscow. The EU really needs to get its act together.

Features

Neil Unmack

ECB keeps hoping in ABS field of dreams

29 August 2014

Mario Draghi expects investors to come if he builds a market that he admits barely exists. Purchases of asset-backed securities might help growth and boost inflation. Yet the obstacles are substantial, and regulation is a thorn. Government aid would help.

Edward Hadas

Review: A pained call for radical financial reform

29 August 2014

Financial Times writer Martin Wolf’s new book is partly a cogent review of what went wrong in the 2008 crisis. But the message economists and policymakers should focus on, especially from a centrist intellectual, is that the best ideas for the future are far from the mainstream.

Andy Mukherjee

Global poverty needs a post-industrial definition

29 August 2014

Criticism is mounting against the $1-a-day threshold, a legacy of industrial-age thinking that equated penury with calorie deficiency. That’s too narrow. Being unable to afford education, medication or old-age security counts as deprivation. So does exclusion from modern jobs.