Hadas: The new autocratic economics is still fuzzy 12 Jan 2017 Muscular leaders have diverging concerns. Oil-dependent Putin does little to promote Russian growth. China’s Xi puts expansion above financial stability, while Turkey’s Erdogan risks the economy for political strength. The common factor is state control, greased with corruption.
Amazon doormat spat reveals nationalist wild card 12 Jan 2017 An Indian minister threatened to rescind visas of Amazon staff unless its Canadian website halted sales of doormats resembling the country's flag. The doormats quickly vanished, but politicians pandering to jingoist Twitter shaming is a real and rising global business risk.
Beijing lobs trade grenade into Trump’s court 11 Jan 2017 China is imposing punitive tariffs on imports of a U.S. animal feed just days before the president-elect takes office. Trump has already talked tough about taxing imports from the Middle Kingdom. Retaliation risks escalating into a trade war that neither side would win.
China bullies South Korea at its own risk 12 Jan 2017 Beijing looks to be exacting economic revenge against Seoul over a U.S. military pact. Sectors riding the "Korean wave" in China, like cosmetics and entertainment, are in the crosshairs. But deep manufacturing ties are harder to break. Excessive harshness would backfire on China.
Market indifference to Samsung swipe unhealthy 11 Jan 2017 Heir Jay Y. Lee is now a suspect in a corruption scandal involving South Korea's president. Yet shares in flagship unit Samsung Electronics comfortably beat an up market. Hardened investors are too used to local company bosses running into trouble – and deftly getting out of it.
Air Products can endure Yingde’s gas tactics 11 Jan 2017 Yingde Gases has answered a bid from its $31 bln U.S. rival with a noxious plan to sell a 10 pct stake via a private placement. It looks like an unfriendly response to an opportunistic move. Air Products' size means it can afford to wade into this messy Chinese boardroom spat.
Ma’s job offer to Trump is no Chinese peace pipe 11 Jan 2017 Alibaba founder Jack Ma met with the U.S. president-elect and pledged to create 1 mln jobs. Trump, well-pleased with this tribute, says he and the Chinese e-commerce tycoon will do "great things" together. There is less to both statements than meets the eye.
Fosun can justify double dip in Portugal 10 Jan 2017 The Chinese investor is upping its stake in lender BCP from 16.7 pct to 30 pct. Fosun is supposed to be deleveraging, and the Portuguese bank still won’t be lavishly capitalised. Still, with BCP trading at 0.2 times book, the Shanghai-based group can argue it is not overpaying.
Bets against Iraq’s OPEC cuts are premature 10 Jan 2017 Traders may have jumped the gun betting Baghdad won’t stick to an output deal. The cartel's second-largest producer has little to gain reneging on the pact and could struggle to maintain record shipments without investment. Higher prices help its cause more than extra barrels.
Alibaba’s new brick-and-mortar bet looks pricey 10 Jan 2017 The Chinese e-commerce giant thinks it can save physical retail. It's offering to take Intime, a struggling operator of mainland malls and department stores, private for $2.6 bln. This is a pricey experiment trying to solve China's traditional shopping woes with tech.
India’s next big experiment could be basic income 10 Jan 2017 A direct cash transfer to citizens could replace a plethora of subsidies and benefits. That would reduce corruption and waste, especially if the handout only goes to the poor. But identifying the worthy will be tough, even with India’s impressive biometric identity database.
Takeda exemplifies Japan’s expertise at overpaying 9 Jan 2017 The $34 bln drug maker is the latest to pay over the odds. It's shelling out a 75 pct premium for Ariad, a biotech with a middling cancer drug. Takeda needs to refill its pipeline as patents on existing treatments expire, but the $5.2 bln purchase price looks too generous.
Air Products has promising formula for Chinese M&A 9 Jan 2017 The $31 bln gas giant is circling Hong Kong-listed Yingde. Inbound Chinese M&A has all but evaporated but Air Products' timing is good: big debts and a boardroom fight have shrunk the target's market value to $700 mln. An existing Chinese presence would help de-risk any deal.
China can ignore ill-advised flight to bitcoin 9 Jan 2017 Beijing has cracked down on people converting yuan to dollars, but seems relatively relaxed about them piling into the virtual currency. That's probably because the bitcoin market is tiny, volatile, and dominated by local speculators: an unreliable channel for capital outflows.
Banks whiplashed by Asia’s distrust of hot money 9 Jan 2017 Indonesia plans new rules to ensure research is "factual", after a downgrade led it to cut ties with JPMorgan. Malaysia is clamping down on currency trading. The moves only highlight Southeast Asia’s vulnerability to capital flight rather than the region's impressive growth.
Carmakers rattled by Backseat-Driver-in-Chief 6 Jan 2017 President-elect Donald Trump's attacks on imports soured the mood ahead of next week's industry jamboree in Detroit. Scrapping a Mexico plant, as Ford did, is easy. Bigger upheavals could spell trouble, though, as a slowing market and autonomous driving jolt financial prospects.
Toyota tantrum may mark peak Twitter-Trump 5 Jan 2017 The president-elect got his facts wrong tweet-threatening tariffs if the carmaker sells Mexican-made Corollas in the US. Hence the stock's limited reaction. A contrasting crash in Constellation Brands shares shows investors starting to focus on more concrete cross-border issues.
It’s past time for Japan to tackle overwork 6 Jan 2017 A suicide at a top advertising firm shines an ugly spotlight on Japan's dangerously long hours. Relaxing a culture of workaholic conformity won't be easy. But official plans to curb overtime are a good start. And a better work-life balance would bring real economic dividends.
Samsung hits a sweet spot in new technology cycle 6 Jan 2017 The world's biggest smartphone-maker expects fourth-quarter operating profit to top $7.7 bln, smashing expectations. As more devices move to new-generation memory chips and displays, Samsung's early investments in those areas are starting to pay off. That bodes well for 2017.
Fidelity gets first dip in China fund shark tank 5 Jan 2017 Fidelity International is the first foreign asset manager allowed to create onshore funds and sell them to select mainland buyers. It enters a brutally competitive sector hobbled by capital account controls, and it can't sell to retail investors. This is still a strategic win.