Asia-Pacific

L’Oréal can save up to buy out Nestlé

7 February 2019

Buoyant demand from Chinese shoppers boosted the cosmetics giant’s sales and margins in 2018. The Lancôme owner’s growing 2.8 billion euro net cash pile may seem an unnecessary indulgence. But it will come in handy if Nestlé gives in to pressure to reduce its 23 pct stake.

India’s rate cut fuels fears of a yes-man governor

7 February 2019

A surprise move to trim the cost of borrowing, less than a week after an expansionary budget, will raise concerns that freshly appointed Shaktikanta Das is dancing to New Delhi’s tune. An election, after all, is months away. Lacklustre price increases, though, provide some cover.

Hadas: GDP forecasters need to lower their sights

6 February 2019

Global growth predictions for 2019 are sinking. There are one-offs, like trade tensions, but larger trends are also at play. Demographics, undercounted new technological gains and China’s middle-income blues all drag down the numbers. The GDP errors carry big risks for debtors.

SoftBank’s Einstein pitch fails relativity test

6 February 2019

Masayoshi Son invoked the Nobel Prize winner’s theories to argue the Japanese group is worth $110 bln more. But adjust his sums for low liquidity and the possibility of squandered cash, and the black hole is small. Massive objects like the Vision Fund distort the laws of physics.

Trump World Bank pick would be fox in the henhouse

5 February 2019

The U.S. president is set to nominate David Malpass to lead the global lender. He’s skeptical of multilateralism and of closer ties to China. A challenger for the job – usually America’s choice – hasn’t yet emerged. Some World Bank priorities, like climate change, could fade.

Central banks’ gold fever is anything but reckless

5 February 2019

Their 2018 purchases of the yellow metal were the second-highest on record and up nearly three-quarters from a year ago. But this isn’t a speculative punt on prices rising. Instead, it’s a logical precaution against rival currencies and U.S. self-harm eroding dollar dominance.

Wirecard shows fintech stars share banking ills

4 February 2019

The payments group denied an FT report alleging false accounting. Yet shares are down 25 pct since last week. Soothing investors will mean bulking up in compliance and boosting transparency. They’re the kind of problems associated with rickety banks, not disruptors.

Nissan’s real Brexit problems have not yet started

4 February 2019

The Japanese carmaker’s U-turn on building sports utility vehicles in northeast England owes more to falling demand for diesel engines than Britain’s impending EU exit. Still, a no-deal Brexit would make it nearly impossible for Nissan to justify current levels of UK production.

Australian bank review has a soft bite

4 February 2019

After almost a year of painful testimonies which helped wipe some $40 bln off the value of the big four banks, a landmark report into financial services recommends oversight of regulators, an overhaul of mortgage broking and of fees paid for advice. It could have been worse.

India Insight: If Modi loses, graft can return

4 February 2019

The prime minister won power by promising good governance and good days. He has largely delivered the former by shifting the consensus on corruption. The latter is elusive. If Modi is weakened in the upcoming election, some of the gains beloved by global investors will be lost.

Japanese carmakers can find trade-war refuges

4 February 2019

A stronger yen docked some $390 mln from Honda's revenue last quarter, adding to other blows. It's been tough to juggle a safe-haven domestic currency and growth that comes largely from overseas. Rival Mitsubishi's stellar results, built on emerging markets, show it can be done.

China cigarette IPO offers unfiltered Beijing bet

4 February 2019

The overseas arm of China Tobacco will list in Hong Kong. Sales abroad are growing. But most of its revenue comes from importing leaves for its parent, a monopoly in a country where 300 million people light up. That's a lot of risky exposure to dated anti-smoking policies.

India’s big budget betrays Modi’s election angst

1 February 2019

A decision to ease efforts to reduce the fiscal deficit will dent the government’s prudent reputation. Yet support for farmers, a new pension scheme and a higher effective tax exemption, even as revenues fall short, will give the prime minister a better shot at a second term.

PlayStation glitch lights fire under Sony CEO

1 February 2019

The $64 bln electronics giant missed operating profit forecasts, as video-games sales disappointed and smartphones tanked. As cash-cow businesses slow, the heat is rising for Kenichiro Yoshida to deliver growth from music and movies - and ditch the unprofitable handsets unit.

KFC is finger lickin’ in a less appetising China

1 February 2019

Mainland appetite for fried chicken helped Yum China turn a fourth-quarter profit and pushed same-store sales up 2 pct, beating forecasts. It's still expanding fast too. That suggests a resilient bet on Chinese consumers: even as budgets tighten, cheap eats stay on the menu.

Singapore’s Grab tempts headquarters curse

1 February 2019

The ride-hailing app plans to occupy a newly designed $135 mln building, under an 11-year lease. From Myspace to Yahoo, lavish moves have been a bad omen. Grab has cash, but is young, unprofitable and in a fierce rivalry with Go-Jek. Tech optimism may have gone too far again.

Amazon and Walmart get caught in India’s web

1 February 2019

The U.S. titans will be limited to operating marketplaces and prevented from being online retailers under New Delhi’s rules. That opens the door for billionaire Mukesh Ambani to power ahead with his own e-commerce plans. The miscalculation by Amazon and Walmart could be costly.

Viewsroom: Why did PG&E file for bankruptcy?

31 January 2019

The California utility may face up to $30 bln in wildfire costs. But shareholders see value and lenders were willing to stump up cash. The board’s desire to cut other expenses may have driven the decision. Plus: How U.S. charges against Huawei may affect the telco industry.

Trump’s trade pounce is a gift to China

31 January 2019

The U.S. president says it’s his and Xi Jinping’s job to strike a tariff deal. Asserting the importance of his personal involvement reflects his desire for a pact and may mean Beijing won’t have to make big concessions. It puts hardline White House negotiators in a tough spot.

Nintendo brushes up gaming skills for 2019

31 January 2019

The $36 bln Japanese video-games giant smashed quarterly earnings expectations thanks to new titles. Even after cutting its Switch console sales target, the maker of Super Mario hits looks on track to challenge rival Sony’s PS4. Nintendo’s beaten-down shares are due a boost.