Money trail shows China sticking to bad habits 16 May 2016 Total credit jumped again in April, suggesting Beijing is making little progress weaning the economy off its addiction to debt. Infrastructure and property investment are still expanding quickly. Despite renewed talk of reform, growth still seems to be the main priority.
Wanda’s $6 bln reshuffle reveals China movie hype 16 May 2016 Wang Jianlin’s Chinese cinema chain is buying some of the tycoon’s assets including recently acquired Legendary Entertainment. Filings show the Hollywood studio lost $556 mln last year. Fantastical valuations fuelled by China’s box office boom are far ahead of financial reality.
India’s Modi can reclaim his "wow" factor 16 May 2016 Two years after a landslide election, business executives are losing confidence in Prime Minister Narendra Modi. Passing a bankruptcy code last week was a major achievement but other landmark reforms look harder to achieve unless Modi reins in his party from divisive politicking.
Blockchain teamwork could help banks fight hackers 13 May 2016 An $81 mln central bank heist and a new attack on a commercial lender underscore the rise of cyber-related risks. The European Central Bank wants banks to log serious incidents. But industry collaboration - as seen with distributed ledgers - would do more to shore up defences.
China trade spat risks blowing out of proportion 13 May 2016 Europe’s parliament voted against granting China “market economy status” at the World Trade Organisation. Yet the move only affects potential anti-dumping defences on 1.4 pct of bilateral trade. China and its partners are attaching too much symbolic importance to the issue.
Apple’s $1 billion plucks a strange fruit in China 13 May 2016 The tech giant says investing in car-hailing app Didi – whose Chinese name is “little orange” – will help it in the People’s Republic. Apple can afford to join a costly battle with rival Uber. But it’s less obvious how that will revive iPhone sales or clear regulatory hurdles.
Nissan heads for racy returns at Mitsubishi Motors 13 May 2016 The Japanese carmaker’s $2.2 bln investment could prove doubly lucrative. With just a modest uplift in sales and margins at its scandal-hit peer, the stake could generate a fat 14 pct-plus return. Meanwhile Nissan is targeting a hefty $440m-plus of annual synergies for itself.
Nissan can help drive Mitsubishi Motors’ recovery 12 May 2016 The Japanese carmaker is paying its smaller peer $2.2 bln for a 34 pct stake. That sounds like a smart investment. Scandal-hit Mitsubishi is one of the weakest players in Japan’s overly fragmented auto industry. Like Renault, it could benefit from pooling resources with Nissan.
China’s planners won’t let go of the stock market 12 May 2016 Regulators are reportedly clamping down on fundraising in hot sectors, and may restrict overseas companies relisting at home. The desire to avoid a repeat of last year’s bubble is understandable. But China’s equity market won’t evolve as long as bureaucrats try to manage prices.
India’s bankruptcy revolution will be a slow burn 12 May 2016 The country has passed a new insolvency code. The overhaul is overdue and ambitious. It could take years to implement properly. In the meantime, creditors will have to rely on other innovative fixes to deal with India’s massive pile of bad debt.
China listing doubts leave Qihoo investors on edge 11 May 2016 The U.S.-listed web group’s shareholders have accepted a $9 bln buyout offer. Yet a regulatory crackdown may scupper plans to float in China. Even after a rebound the shares trade at an 8 pct discount. That’s scant compensation for the risk that the buyout group may walk away.
Credit Suisse investment bank decline will persist 10 May 2016 The Swiss bank cut costs briskly while keeping capital levels steady in the first quarter. Net margins in wealth management also outdid bigger rival UBS. But boss Tidjane Thiam’s botched restructuring of Credit Suisse’s trading arm is in danger of leaving lasting scars.
Baidu selloff understates long-term health risks 10 May 2016 Regulators have ordered China’s top search engine to rein in healthcare advertising after a scandal. That could knock as much as a fifth off earnings. Investors who have marked the shares down by 13 pct so far may be underestimating the broader impact on Baidu’s business model.
Japan’s line in sand over yen is a short-term fix 10 May 2016 Finance Minister Taro Aso has stepped up the rhetoric about currency strength. Actual intervention would probably require a further rise, plus U.S. support. That would tell speculators to back off. But the yen remains at the mercy of global events as well as domestic policy.
China could pick up more bargains in commodities 10 May 2016 The People’s Republic is warming up to the sector as global miners race to cut debt. The latest deal sees China Molybdenum snap up Freeport’s Congo copper project for $2.7 bln. At the current pace, China’s hunger for overseas mining assets could return close to peak levels.
China’s backdoor listings problem is self-made 9 May 2016 The securities regulator is studying the impact of overseas Chinese companies relisting at home via shell companies. Yet it is a self-inflicted problem. Dizzying stock market valuations and delays in reforming the IPO process are to blame. The regulator has had a hand in both.
Toshiba fluffs leadership overhaul 9 May 2016 The scandal-hit Japanese group named two new bosses. Neither is ideal: the CEO is a clean pair of hands but hails from a now non-core business. The chairman is an insider who oversaw big writedowns at the U.S. energy unit. It’s a setback to an otherwise decent effort to clean up.
Star status is Philippines’ to lose 9 May 2016 The former sick man of Asia is in rude economic health. But a motley crew are vying for votes in Monday’s election, including a Trump-like strongman and the daughter of a film star. If outgoing President Aquino’s reform drive is abandoned, foreign investors may bail out.
Sliding exports show Asia needs new engine 9 May 2016 The global trade slowdown has removed an important source of growth. Exports from Korea and India have fallen for over a year. Even China is likely to sell less to the rest of the world in 2016. Asian economies will need to rely more on domestic demand and services.
Rio Tinto goes Genghis on the copper market 6 May 2016 By expanding its $5.3 bln Oyu Tolgoi mine in Mongolia, the miner hopes to ride an upswing in demand. Under-investment in new mines and declining quality could see the market in deficit by 2020. But there’s a risk that copper goes the way of iron ore, into a damaging supply war.