Review: Pragmatic management wisdom from the East 21 Sep 2012 Can businessmen learn from Confucius? Academics Ikujiro Nonaka and Zhichang Zhu argue that a flexible Eastern approach to decision-making provides a good framework for managers everywhere. The philosophy is a little hazy, but cultural fusion makes sense in a globalised world.
Osborne should take King’s naughty fiscal gift 21 Sep 2012 Mervyn King is at it again. The BoE governor made his support for the government’s austerity drive too plain and now is giving the Treasury excuses to miss its debt target. Chancellor George Osborne should accept the gift. Euro crisis helps the case for looser not tighter policy.
Spanish reform push aims at stigma-free bailout 21 Sep 2012 Madrid fears that an abject call for ECB help would hurt national pride. It’s more dignified to take a multi-year reform plan to the central bank’s new bond-buying window. But falling Spanish yields may make Germany feel that Spain doesn’t need the ECB’s help.
China changes leaders, but what comes after Hu? 21 Sep 2012 The country’s new top brass will be revealed within weeks. But what does it mean for investors? What do slowing GDP and anti-Japan protests say about China’s future? And what’s the deal with Bo Xilai? Our new book, “Beijing Opera”, explains the geopolitical event of the decade.
Real estate wave helps an IPO avoid tech wipeout 20 Sep 2012 Newly listed shares of Trulia, an online property listing service, popped by over 40 pct on their debut. That defies the dire dot-com market evidenced by the likes of Facebook and Groupon. The U.S. housing recovery is a good story but Trulia is also still hitched to the Web.
Deal lawyers deserve rewards for sound judgment 20 Sep 2012 Delaware’s top court upheld a whopping $304 mln payout to attorneys who won $2 bln from Grupo Mexico over a dodgy transaction. The company wants a fresh hearing on the fees, but judges should demur. With weak M&A lawsuits on the rise, carrots should encourage stronger ones.
Exxon picks right place at wrong time for U.S. oil 20 Sep 2012 A $1.6 bln purchase of North Dakota assets could herald more deals to come for the energy titan. The state is America’s fastest-growing producer, but its low jobless rate means oil production costs are soaring. Exxon’s renewed if belated interest in domestic crude cuts both ways.
Big scores inspire participation in sports M&A 20 Sep 2012 Billionaire Philip Anschutz is shopping an empire that includes the Stanley Cup champs, the NBA’s Lakers and David Beckham’s U.S. soccer club. After the eye-popping $2.2 bln Dodgers sale price and Manchester United’s IPO, it’s no wonder if owners get off the sidelines.
Markets struggle with true values for Xstrata, BAE 20 Sep 2012 Shareholders try to find the right price in deals, but their perspective is too financial and short term. Besides, no price is right if a tie-up is basically wrong - overleveraged, undermanaged or self-destructive. Both Glencore-Xstrata and EADS-BAE might fail this basic test.
New look U.S. MLPs riskier, but may be worth it 20 Sep 2012 The $350 bln tax-privileged master limited partnership sector mostly involves safe, fee-based energy assets like pipelines. Newcomers like Texas-based Susser Petroleum, a fuel distributor, aren’t so predictable. But high yields - 8.5 pct for Susser - can make up for the dangers.
Jefferies douses Wall Street hopes with reality 20 Sep 2012 The bulge-bracket wannabe beat earnings forecasts in its third quarter as markets improved. But its stock tanked, as did rivals’. Returns, though higher, remain low and costs aren’t falling. Until that changes, even trading at book value looks a stretch for most investment banks.
Slovenia finds delay doesn’t pay 20 Sep 2012 The richest Yugoslav republic at independence has been slow to reform its economy. Now Slovenia’s budget and pension systems are out of whack and the state-owned banks are full of bad debts. With or without an EU bailout, it must complete the work postponed for two decades.
BSkyB should start to build in new bid premium 20 Sep 2012 The UK media watchdog has savaged James Murdoch for mishandling the phone-hacking affair, but affirmed that News Corp is fit to be a big shareholder in BSkyB. News Corp is changing. But the logic of taking full control of Sky before the next UK election is strong.
Putin’s toughening raises Russian uncertainty 20 Sep 2012 Russia has become even more authoritarian since Vladimir Putin reclaimed the presidency last May. He may be losing touch with both the economy and civil society. Investors should take note: far from making Russia more stable, it reinforces its unpredictability.
ECB bond-buying hardball is only half credible 20 Sep 2012 The central bank’s bailout-light plan depends on countries sticking to serious reforms. But pulling the plug if a country veers off track could have disastrous consequences. That weakens the central bank’s hand, but doesn’t mean that bond-buying is a pathway to unbridled moral hazard.
India’s striking shopkeepers’ fears are overblown 20 Sep 2012 New reforms will eventually open the door to global retailers like Wal-Mart and Tesco, and will fundamentally change India’s fragmented market. But India’s millions of small shops won’t go out of business any time soon. Competition and consolidation will be good for many of them.
China’s "third strike" in 2013 is the one to watch 20 Sep 2012 China’s new leaders will be ushered in within weeks, but the world may have to wait until a year from now to hear what they stand for. That’s when the third plenary, or meeting of top politicians, should happen. Communist Party tradition shows that is the date that matters most.
Abu Dhabi’s residency crackdown looks desperate 20 Sep 2012 After a $10 bln bailout and pushing top developers to merge, Abu Dhabi is forcing public sector employees to move from glitzy Dubai to the conservative capital. It’s a bid to prop up property prices and give the city a new dynamism, but such interventionist policies fall short.
Indonesia’s insolvency law is broke, needs fixing 20 Sep 2012 A court has declared the nation’s largest mobile operator bankrupt following a dispute over just $557,000. If the past is any guide, the verdict will be overturned. But Jakarta must revise its insolvency law before investors who have shrugged off the incident change their minds.
Obama may find an exceptional friend in Facebook 19 Sep 2012 The social network’s No. 2, Sheryl Sandberg, should be on the short list for a top economic job in a second Obama term. But she’d give up some $130 mln in unvested equity to leave. Current boss Mark Zuckerberg’s largess could bridge the gap. But it may cost Facebook shareholders.
U.S. muni investors likely to avoid fiscal cliff 19 Sep 2012 Washington’s efforts to close the budget gap may threaten the tax-exempt status of municipal bonds. But tinkering with this haven would be easier for new bonds than existing ones. Muni borrowers could face a stark 2013, but recent buyers of the bonds will probably be spared.
Regulatory pushback turns up heat on Marcus Agius 19 Sep 2012 Newly published letters from UK regulators cast doubt on evidence given by Marcus Agius, the former chairman of Barclays bank, to a parliamentary investigation into the Libor scandal. The fresh developments may make it tougher for him to rehabilitate his reputation.
Boeing could play BAE-EADS spoiler on many fronts 19 Sep 2012 Europe’s $45 bln defense deal needs U.S. security clearance and perhaps a nod from Congress. Boeing wields enormous clout in Washington and has a history of using it against rivals. Valuations and looming military cuts also mean a bid for all or part of BAE can’t be ruled out.
Greek Coke bottler may find life sweeter in FTSE 19 Sep 2012 Coca-Cola Hellenic is now worth 22 pct of the entire Athens bourse. The world’s second-biggest Coke bottler isn’t obviously undervalued. But adopting a UK primary listing could shield investors from any Greek euro exit, and yield a profile-boosting perch in the FTSE.
Japan slithers further into the monetary morass 19 Sep 2012 The Tokyo central bank decision to say it will print more money next year is unlikely to change much in a country that has defied conventional economic wisdom for decades. But it does make quantitative easing a more dangerous and global contest.
Ethical economy: Remembering the 1960s 19 Sep 2012 This is a good moment for an economist to take stock of a decade of revolutionary dreams. At first glance, the idealists got nowhere. The capitalist system has not been overthrown and poverty persists. But the idealistic fervour has deeply marked the economy. More is needed.
Goldman’s Mr. 25 Standard Deviation hard to follow 19 Sep 2012 Despite his wacky crisis characterization, David Viniar played a big role saving Goldman from the mortgage rout and is the rare banker to succeed in the CFO role. Losing him hurts even if replacement Harvey Schwartz is no slouch. Viniar’s guidance from the board will be welcome.
Tiger beer sale lobs Thai ball into F&N’s court 19 Sep 2012 Bangkok moguls have blessed Heineken’s bid for Asia Pacific Breweries, clearing the way for a large cash payout to 40 pct shareholder Fraser & Neave. But the Thais still want to buy the rest of the Singaporean conglomerate. Its board needs to convince investors to hold out.
Consumer boycotts won’t decide Sino-Japan fight 19 Sep 2012 Protesters have called for shoppers to stop buying Japanese goods. But past attempts to snub French wine or Danish goods suggest this rarely works. And if Chinese workers attack Japanese factories, they would share much of the pain. Economic war looks reassuringly hard to wage.
ECB’s new clout could sort EU bank capital mess 19 Sep 2012 The European Commission thinks the euro zone’s rate-setter should vet the internal models used by banks to work out their capital ratios. The downside could be that some lenders need more capital. The upside could be that investors start to believe bank risk-weightings.