Asian airlines need the right kind of mojo 23 Mar 2015 A soon-to-be-launched Malaysian carrier, Flymojo, is the latest cloud in Southeast Asia’s overcrowded skies. More competition is the last thing a recovering sector needs. It’s a reminder that in aviation, overcapacity and financial losses are always just around the corner.
Founding father made Singapore rich but not happy 22 Mar 2015 Lee Kuan Yew, who has died aged 91, turned a malarial dump into a super-wealthy small economy. His authoritarian style and single-minded pursuit of economic growth are now outmoded. Singapore’s next challenge is to strike a balance between being a global city and a caring nation.
Global trends through a Tiffany glass, darkly 20 Mar 2015 The luxury retailer’s tarnished outlook reflects a new economic normal. A slump in Japan reflects that nation’s fiscal constraints, while the rising dollar has hit sales elsewhere. On the bright side, growth in Europe is rebounding and Chinese consumers are playing their part.
Chanel’s China price cut signals luxury turbulence 20 Mar 2015 The fabled French brand has taken the unprecedented step of lowering prices in Asia. The weak euro has fed a troublesome grey market and fueled perceptions high-end groups are ripping off Eastern shoppers. Despite the risk to their bottom lines, rivals may have to follow suit.
China’s world bank has rickety foundations 20 Mar 2015 The country’s patchy record of funding big projects at home and abroad hasn’t deterred Western countries from rushing to join its new Asian infrastructure bank. To lure private capital, the body will have to be commercial and transparent. Early signs suggest it will be neither.
China’s YouTube makes for uncomfortable viewing 20 Mar 2015 Youku Tudou’s losses are widening, as it bets ever more heavily on movie production, gaming and live broadcasting to offset its loss-making internet video business. These new ventures will further erode profitability. The company’s standalone prospects are far from compelling.
China’s capital flight lands on New York doorsteps 19 Mar 2015 Chinese investors have pumped $10.4 billion into U.S. real estate in two years, most of it in Manhattan. And that doesn’t include the homes they actually live in. Americans should welcome their new neighbours. The question for China is how many of its elite it can stand to lose.
Deflation needle buried in haystack of history 18 Mar 2015 A BIS study of falling consumer prices going back to 1870 shows only a weak link with lower GDP growth. The cheery finding may lead policymakers astray. The sharp end of today’s deflation threat lies in depressed wages. It has drawn blood before, and could do so again.
Nintendo goes Super Mario with mobile push 18 Mar 2015 The struggling Japanese giant has bowed to investor demands to make games for smartphones. A library of well-known characters gives it a big advantage. If the likes of Pokemon are as popular as hits such as Candy Crush, investors’ hopes of a record score will be justified.
Chinese developers’ debt tricks come home to roost 18 Mar 2015 Investors are still mystified by how housebuilder Kaisa’s borrowings more than doubled in six months, bringing it close to collapse. The answer may lie in two kinds of accounting sleight of hand, seemingly blessed by auditors. Kaisa isn’t the only property company being creative.
BHP takes no chances with South32 spinoff 17 Mar 2015 The new mid-sized miner will emerge with comparatively little debt. While BHP Billiton is spinning off unloved assets, South32’s balance sheet will be strong enough to allow new investment. The low gearing could also make it an attractive takeover target for a debt-funded bidder.
Finding double-digit growth in India’s GDP fog 17 Mar 2015 New statistics are deceptively rosy. If the economy can grow 7.4 pct when local interest rates are high and world demand low, how tough would 10 pct be? But complacency may lead to bad policies. Efficiency trends peg potential GDP growth at just 7 pct. Only reforms can lift it.
Japan index: Cheap yen brings some gains 17 Mar 2015 The Breakingviews Abenomics Index rose at its fastest pace in 16 months in January. A weak yen pushed stock and bond prices higher, and manufacturing output was strong. But wages are anaemic, and consumption is still struggling to recover from last April’s sales tax hike.
GE’s crumbs make for Australian buyout feast 16 Mar 2015 The U.S. conglomerate is offloading its consumer lending arm down under in one of the country’s biggest private equity transactions. Yet the $6.3 billion deal shrinks GE Capital’s balance sheet by just over 1 percent. The group has far to go to reduce its dependence on finance.
Singapore’s immigration squeeze brings extra risks 16 Mar 2015 The government won’t ease curbs on foreign workers even though local labour will hardly expand. Its motivation is only partly political. If the crowded, ageing city-state can’t grow without enlarging the workforce, future incomes will stagnate. But cutting the cord may be messy.
India’s "tax terrorism" proves hard habit to kick 13 Mar 2015 The government could honour a campaign pledge to make taxation more certain by scrapping a rule that allows it to seek payment for past transactions. That is politically fraught but may be less damaging than pursuing the likes of Britain’s Cairn Energy for old deals.
China’s art market paints itself into a corner 13 Mar 2015 The People’s Republic has become one of the world’s largest art hubs, with sales of $12 bln in 2014. Yet minimalist cross-border trade sketches a picture of an introverted giant: heavy duties and local tastes mean most of the action is staying firmly within China’s borders.
U.S. toll road investor dodges predecessors’ ditch 12 Mar 2015 Australia’s IFM will pay $5.7 bln for a bankrupt Indiana turnpike operator, 50 pct more than Macquarie and a Spanish partner shelled out in 2006. Less than half the amount is debt, though, and the road is in far better shape. That should help the firm steer clear of any potholes.
Asia’s Alibaba wannabes buy into wishful thinking 12 Mar 2015 A new generation of Asian e-commerce companies is inviting comparison with Jack Ma’s tech colossus. The analogy is useful but not always flattering. Like Alibaba these young companies benefit from fast-growing online markets - but are less likely to become true giants.
Twin ghosts haunt Malaysia’s sovereign fund 12 Mar 2015 The country created 1MDB to finance big national projects, but poor management has left it with net debt of more than $10 bln. Its links with the prime minister complicate the mess. Though the fund is now being restructured, the clean-up brings both financial and political risks.