Olympus investors price in a worst-case scenario 8 Nov 2011 Shares in the Japanese company have fallen 70 percent as gruesome news of misdeeds in deals has emerged. But assuming the core business is viable – and Olympus escapes giant penalties – significant value may lie beneath the mess. Only the bold will be tempted, though.
Fortis India’s $665 mln u-turn hard to justify 8 Nov 2011 The family-controlled Indian group is buying an unlisted, Singapore-based healthcare operator from its own founders. Yet a year ago Fortis claimed its focus was purely domestic. Minority shareholders would probably have got a better deal if the cash had been spent in India.
Japan Inc’s earnings problems are home grown 7 Nov 2011 Honda, Panasonic and Sony all reported grim quarterly earnings. Weak global demand, a strong yen and natural disasters are partly to blame. But they underscore deeper problems caused by domestic policies and Japanese exporters’ long-standing neglect of profit margins.
Joining "too big to fail" club is a bonus for BOC 7 Nov 2011 Bank of China has been added to the list of globally systemic banks at the request of domestic regulators. Though it already has government backing, SIFI status could help BOC win more business abroad. And it doesn’t need extra capital. More Chinese lenders may want to sign up.
Qantas vindicated in workforce battle 4 Nov 2011 The Australian airline’s decision to ground its fleet a week ago looked like commercial madness, and followed tactical errors by the CEO. But a resolution with recalcitrant unions is in sight. The gamble will pay off as long as Qantas wins back passenger confidence.
U.S. deficit drama needs to play well overseas 3 Nov 2011 Foreign central banks, among America’s most reliable lenders, have been cutting their exposure to Uncle Sam’s debt since August. As Washington readies “Deficit Debacle: The Sequel” for primetime this month, legislators should keep foreign audiences in mind.
China must hurt the rich to save the rich 3 Nov 2011 Half the country’s well-off want out, a recent survey argued. Despite their considerable wealth, it’s not so bad if they go. More important is ensuring China creates a new generation to replace them. That means making reforms that might speed the old hands on their way.
LG rights issue won’t help it win smartphone wars 3 Nov 2011 Investors dumped shares in the Korean electronics maker even before it announced a surprise $1 billion cash call. Loss-making LG has fallen behind Samsung and Apple in the race to make trendy smartphones. It’s not clear how throwing good money after bad will help.
India’s quest for foreign coal looks here to stay 3 Nov 2011 The country has the world’s fourth largest coal reserves, but environmental restrictions result in a struggle to keep up with demand. Indian firms have already spent $10 bln this year on mines overseas. Though imports are pricier, the domestic alternatives don’t look much better.
Debt triangles return to haunt Chinese firms 2 Nov 2011 Despite robust sales and earnings, Chinese companies’ operating cash flow deteriorated sharply in the first half - suggesting many have increased credit to customers. If they can’t pay, a wave of ugly bad debt could hit companies and their lending banks.
Korea may change monetary tack to placate young 2 Nov 2011 Exports are slowing. That used to be a signal for the central bank to ease interest rates to help the big exporters cope. But they are no longer creating jobs young Koreans want. Political pressure from the young may push the bank to be tighter – even if that slows growth.
India ratchets up currency pressure on China 2 Nov 2011 Tired of a ballooning trade deficit, Indian trade negotiators are threatening duties on Chinese goods, starting with power equipment. Tit-for-tat tariffs are fruitless, but as a fellow emerging giant, Indian calls for China to revalue its currency would add weight to the debate.
New Delhi’s fiscal profligacy starts to bite 1 Nov 2011 India is set to bust its fiscal deficit/GDP target. Half way through the year, it has used two-thirds of the sums set aside. With inflation close to 10 percent and growth sluggish, there is an urgent need for the government to get a grip of public spending.
Tough markets prompt Nomura soul-searching 1 Nov 2011 After a $589 million quarterly loss, the Japanese group is shrinking its investment bank. It’s not alone. But unlike peers, Nomura was sub-scale to begin with. Without a sustained market recovery, it is hard to see how Nomura’s global ambitions can survive.
Japan acts alone in global financial mess 31 Oct 2011 Monday’s unilateral effort to keep the yen from rising will probably work as well as the last one – not very much. Tokyo can’t easily resist the pressure from foreigners fleeing troubled currencies. The G20 could move the world towards financial balance, but won’t try hard soon.
China’s regulatory reshuffle avoids real change 31 Oct 2011 Three retiring top financial regulators have been swapped with former bank heads, trained for life in the system. Overlapping roles mean their powers will be constrained. It suggests China’s banks won’t get the sweeping reforms they need.
India’s anti-graft movement has life after Anna 28 Oct 2011 Anna Hazare’s anti-corruption campaign is imploding. There are differences between the group’s leaders, and allegations of financial irregularities. But whatever happens to Team Anna, there are signs that the movement he has come to embody will have a life of its own.
Sahara’s $5 bln savings spat is India’s loss 28 Oct 2011 The Indian savings house has been ordered to return a whopping $4.9 bln raised from nearly 30 million mostly rural investors. The episode is unlikely to help confidence among small savers. Yet accessing their capital is vital to help India’s development.
Pitching in on Europe is in China’s best interest 27 Oct 2011 China has suggested a contribution to Europe’s bailout would come with strings. But as a beneficiary of global trade, the world’s number two economy has good reason to do whatever it takes to secure a stable euro zone. That would also spare China a rapid and painful adjustment.
Chinese censorship runs on greed more than fear 27 Oct 2011 After a series of PR fumbles and web-inspired protests, the authorities are stepping up Internet controls. Rumour-mongers are even being arrested. Yet many of these curbs depend on companies and investors playing along. While growth is rapid, greed motivates more than fear.