Oil rout emboldens Saudi Arabia’s reforming prince 14 Jan 2016 The kingdom’s Deputy Crown Prince Mohammed bin Salman is being emboldened by the collapse in oil prices. The son of Saudi’s ageing king has emerged as the driving force behind economic reforms aimed at transforming the state. But for investors, his growing power carries risks.
Weaker yuan would be no panacea for China Inc 14 Jan 2016 A sharp devaluation would yield some winners and losers: machinery-makers would gain and airlines would suffer. But overall this would do little for the real economy. Exports are a declining driver of Chinese growth.
Take apocalyptic market calls with sackful of salt 13 Jan 2016 Doom mongers are on the prowl. Societe Generale’s Albert Edwards predicts an “Ice Age” in which the S&P 500 loses three-quarters of its value while RBS analysts’ advice is: “Sell (mostly) everything”. It’s much easier to be enlightened by their analysis than make money from it.
Offshore squeeze sets back China’s yuan goals 13 Jan 2016 The central bank has sucked renminbi out of Hong Kong, sending overnight interest rates soaring. The show of force helps stabilise the short-term exchange rate. But it delays the gradual shift to a less controlled currency, and will force officials to tighten capital controls.
Grolsch could leave bitter taste at Asahi 13 Jan 2016 Japan’s top brewer is eyeing beers left over from ABI’s takeover of SABMiller. A mooted $3.4 bln tab for Peroni and Grolsch sounds frothy, especially with limited potential to cut costs. Asahi looks desperate for overseas growth, even at the expense of shareholder value.
Wanda builds an empire Hollywood can only dream of 13 Jan 2016 China’s richest man is buying a U.S. studio for $3.5 bln. His Dalian Wanda group and rivals like Alibaba Pictures are investing in all sorts of film businesses. Such vertical integration - banned in the United States - shows the allure of one of China’s fastest-growing sectors.
China’s troubles catch Japan off-guard 12 Jan 2016 Japan is highly sensitive to its larger neighbour’s economic health. Market turmoil is also strengthening the yen, threatening profit and prices. This could hardly come at a worse time: policymakers already battling deflation and stagnation have few levers left to pull.
Smartphones battle web giants for China payments 12 Jan 2016 Apple and Samsung are joining the fight for mobile wallets in the People’s Republic. The smartphone makers have teamed up with state-owned UnionPay to take on dominant web groups Alibaba and Tencent. UnionPay’s card network and technology may give the new alliance an edge.
An unstable yuan is part of China’s new normal 11 Jan 2016 Surprise moves in the currency have left global investors guessing about foreign exchange policy in the People’s Republic. Doubts about the central bank’s ability to manage the exchange rate add to the uncertainty. After years of tight control, instability looks here to stay.
South Korean deal offers hint at Facebook’s future 11 Jan 2016 Kakao, owner of the country’s main chat app, is buying top music streamer Loen for $1.6 bln. Asia’s big messaging outfits are all moving into content and e-commerce to cut their reliance on ads and games. The same logic could hold for Facebook’s Messenger and WhatsApp services.
U.S. jobs bring gorging market bears up short 8 Jan 2016 Strong employment gains in December support the Fed’s planned gradual rate hikes. The global New Year stock slide stalled, too. Chinese markets stabilized, and investors relished the 292,000 American jobs added last month. The outlook may be murky, but it’s not all bad.
Thruppence: Which brand of electric car? 8 Jan 2016 Tesla Motors and Faraday Future, which just unveiled a racing-car concept, are named after electrical pioneers. Breakingviews columnists run the gamut from Apple to Roomba as they weigh in on what kind of association, scientific or otherwise, would make a marque with them.
China’s new economy most vulnerable to stock slide 8 Jan 2016 Recent market jitters have dragged valuations for Shanghai-listed groups below their 10-year average. But the Shenzhen bourse, which is dominated by private sector firms, remains relatively expensive. A loss of confidence by retail investors risks choking more vibrant groups.
Samsung offers glimpse of 2016’s tech slowdown 8 Jan 2016 The South Korean giant’s fourth-quarter operating profit was $5.1 bln, below expectations. Weak demand for smartphones was a factor. But Samsung also faces falling prices and overcapacity in chips and display. The disappointing year-end suggests tougher times lie ahead.
Noble’s banks matter more than its credit score 8 Jan 2016 A second rating agency has downgraded the struggling commodity trader to “junk”. That’s a further blow to sentiment. But investors were already wary and the financial impact should be limited. What matters is that Noble’s lenders, acting in their own interests, remain supportive.
China proves fast learner of painful market lesson 7 Jan 2016 It ditched a stock-market circuit breaker days after its introduction. Quite right: the mechanism did more to stir concern about pent-up selling pressures than to calm markets. The speed with which China made this volte-face bodes well for its integration into global markets.
China’s FX fall is a new market blight 7 Jan 2016 The yuan’s fall is a new ingredient in a cocktail of concerns that includes slowing growth in emerging economies, lower oil prices and geopolitical tensions. Copycat Asian currency moves would unleash a new wave of disinflation which central bankers are ill-equipped to battle.
China market confusion has investors fearing worst 7 Jan 2016 The tumbling yuan may be a sign the People’s Republic sees currency devaluation as a solution to its economic woes. Or maybe planners are struggling to adapt to more liberal markets. Suspended stocks heighten the sense of chaos. For the rest of the world, the signs are ominous.
Apple’s Asia suppliers have bigger challenge ahead 7 Jan 2016 Reports of coming output cuts have hit shares in several of Apple’s component makers. Erratic sales are to be expected with the iPhone. The real test will be adapting to a more uncertain era where smartphones are no longer the main growth driver.
Apple doldrums echo early 2014 false alarm 6 Jan 2016 The $570 bln iPhone maker’s stock is off 15 pct since the end of November. Reports that suppliers are cutting production are the latest concern. Sales didn’t surge last time Apple offered an only slightly upgraded handset, either. The company’s shares are even cheaper this time.