Singapore could use a fresh approach to water 3 Aug 2015 The city-state built its economic success partly on carefully managing scarce H2O and reducing reliance on foreign sources. Now Singapore wants to be self-sufficient. But with the population set to double, the quest for water independence risks becoming a distracting pipe dream.
Breakdown: Taxing journey to India’s single market 3 Aug 2015 India’s boldest tax overhaul in 60 years will fall short of its early promise. Over time, however, the proposed goods and services levy could prove a huge positive for companies and consumers. It would also show Prime Minister Narendra Modi’s reform drive is intact.
Olympics committee gets it right with Beijing 2022 31 Jul 2015 The Winter Games won’t boost China’s growth, end repression, or win the country much extra respect. It might help soft power, but then most countries already do whatever China asks. Freed from such false hopes, everyone can sit back, have fun and admire the fake snow.
Carrefour suggests Tesco can retain global goals 31 Jul 2015 The French retailer is performing better in Latin America and Asia than at home, while its similarly sized UK rival might sell foreign assets to relieve balance-sheet strain. But if Tesco can live with the debt, it might be emboldened by Carrefour’s global shopping experience.
Numbers add up to HSBC leaving London 31 Jul 2015 The global bank is reviewing its head office location based on 11 criteria such as economic importance, transparency and tax. A ranking based on data compiled by Breakingviews shows Singapore, Hong Kong and even Toronto are more attractive than HSBC’s current home base.
Philip Morris can cut down easily in Jakarta 31 Jul 2015 The tobacco giant must lift the free float of its Indonesian unit. The potential $1.5 billion sell-down comes as an economic slowdown hits cigarette sales. Luckily for the Marlboro man, investors can hardly ignore a share sale by the country’s largest listed group.
Malaysian crisis could do lasting financial damage 30 Jul 2015 Prime Minister Najib Razak’s sacking of his deputy opens the door to a protracted power struggle. The economy can ill-afford it. Fading consumer and investor confidence and a slumping currency could mean a long period of high interest rates, anaemic growth and soured loans.
Jailed Chinese tycoon’s deal deserves a hard time 30 Jul 2015 Huang Guangyu wants to sell $1.45 bln of stores to GOME, the Chinese electrical chain he founded. The complex, pricey-looking, and as yet poorly explained deal would give him majority control. Outside investors, who get a say, must ask if this is really the best they can get.
Edward Hadas: Nikkei joins demographic denial cult 29 Jul 2015 Nikkei is the latest Japanese company to look for growth outside the shrinking domestic market. Its Financial Times purchase may work out, but the approach is flawed. Few companies can profitably escape their demographic destiny. It may be better to accept steady decline.
China carbon vow shows change in political climate 29 Jul 2015 Beijing’s new emission goal is convincing and could be legally binding. It’s a change of heart for a country that frustrated climate talks in the past. The commitment to change is real – even if a recent stock rout underscores how vulnerable reform is to domestic stresses.
Fickle FX markets are a pain to trade 28 Jul 2015 Currency moves often appear arcane to outsiders. These days, insiders are also flummoxed. Plausible theories can fall apart overnight. A big problem is that traders lack conviction. They are hamstrung by patchy liquidity and reduced knowledge about market positions.
Market sirens lead China astray 28 Jul 2015 Regulators say they will keep supporting stocks. That unwise pledge is the high price of being a financial free rider. Like many governments, China’s authorities found the easy gains from a rising market irresistible, and have ended up its slaves.
Baidu reinvention needs a roadmap to profit 28 Jul 2015 The Chinese search engine giant has begun to explain its big bets on “online-to-offline” services. There’s promise, but competition is fierce and subsidies are rife. Investors have cut $15 bln from Baidu’s market cap in 2015. They need a clearer idea of where it is headed in O2O.
Starbucks serves up a tepid brew in Johannesburg 27 Jul 2015 The coffee giant has been blitzing China, but its move into South Africa is more cautious. Although the country offers a growing middle class, GDP growth is slowing. And too few Africans can afford the “Starbucks experience” for rapid expansion across the continent.
China worries start now for Visa and MasterCard 27 Jul 2015 The People’s Republic will open its $7 trln bank card payment market to outsiders. Yet Visa and MasterCard, whose shares have risen since the decision, face an entrenched incumbent and online rivals like Alibaba. The hype from getting market access looks premature.
Cement spat is hostile M&A, Chinese-style 27 Jul 2015 The struggle over the $2.7 billion Shanshui chucks lots of Hong Kong corporate finance quirks into the mixer. Dilutive share issue? Check. A long trading halt, lawsuits, and unstable junk bonds? Ditto. It’s a fresh reminder of the risks of investing alongside powerful founders.
Rob Cox: FT is to Nikkei as Jim Beam is to Suntory 24 Jul 2015 Outside Japan, the $1.3 bln purchase of the salmon-hued newspaper is hard to fathom. The finances may never stack up. From a Japanese perspective, the calculus is different. In a shrinking market, without a product that travels internationally, deals like this are existential.
Financial logic in $1.3 bln FT buy is paper thin 23 Jul 2015 Japanese media group Nikkei is taking a bold step with its purchase of the Financial Times. The price equates to 35 times adjusted operating income. Sure, Nikkei gets a bucketload of kudos. But the tag is around three times higher than the multiple enjoyed by quoted media peers.
South Korea might need stronger medicine than QE 23 Jul 2015 The slowest quarterly GDP growth in six years points to a malaise deeper than a virus outbreak. A weaker currency can help with faltering exports, but it won’t free households from a debt trap. A bold cocktail of tax breaks, rebates and money-printing might be more effective.
Green bonds struggle to justify the hype 23 Jul 2015 China’s first eco-friendly bonds push this year’s issuance close to $20 bln. The market has grown fast. But definitions are fuzzy, returns are humdrum, and it’s not clear what problem this solves for corporate issuers, most of whom could sell conventional debt at similar rates.