China slowdown presents world with triple risk 25 Aug 2015 The People’s Republic may produce less for its own use, pay less for what it consumes, and accept fewer dollars for what it exports. These threats will squeeze worldwide corporate profitability and new investment. Commodity prices and stock markets could stay jittery.
Tech’s real China syndrome victims are yet to fall 24 Aug 2015 Facebook, Apple, Amazon and Microsoft lost nearly $200 bln of value in a week. China’s woes sparked the rout, but the problem was investors’ giddy faith in growth. Public tech stocks may recover. Fantasy valuations of private firms like Uber, though, will take the bigger hit.
Investors’ self-doubt worsens equity woes 24 Aug 2015 Global equities are extending declines. Valuations can’t quite explain the depth or breadth of losses. Investors’ low conviction in past asset allocation decisions could have more to do with it. So might waning faith in policymakers riding to the rescue.
China’s ailing stocks are now contagious 24 Aug 2015 Mainland shares are tumbling again. Unlike in July, this sell-off is hurting currencies, commodities, and other Asian bourses. Two things have changed. There’s now the threat of devaluation. And bungled interventions cast doubt on China’s ability to manage markets.
Uber faces a competition pile-up in Asia 24 Aug 2015 The taxi-hailing app may be a Silicon Valley darling but it’s an underdog in China and India where tech giants are backing larger rivals. A competitor is even funding its top opponent in Southeast Asia. The anti-Uber alliance calls the group’s $51 bln valuation into question.
Equity investors succumb too willingly to gloom 21 Aug 2015 Rich-world stocks have sunk as markets take in bad Chinese economic news and sliding currencies in manufacturing powerhouses. True, slowing growth in emerging markets may hold back global activity. But indiscriminate selling suggests investors aren’t being entirely rational.
China’s auto industry in lower gear, not reverse 21 Aug 2015 The world’s largest car market no longer promises super-fast growth and fat margins. The slowdown has hit both titans such as VW and locals like BAIC. Still, gloomy predictions about stagnating sales this year underplay China’s long-term potential.
Rob Cox: Tianjin deserves to be a Cuyahoga moment 20 Aug 2015 The chemical blasts that rocked China’s No. 6 city have exposed a lethal coziness between industry, government and party - and an endemic failure to put human life over economic development. Like the time an Ohio river caught fire in 1969, this feels like a wake-up call.
Yum adjusts Chinese flavouring, now for packaging 19 Aug 2015 The KFC parent has waved off Sam Su, the man who practically invented fast food in China. Su’s tinkering with the classic menu wasn’t enough to overcome a slew of unfortunate food scares. For a crispy golden sequel, Yum could do worse than spin off the China business altogether.
China pharma buyout keeps take-private trend alive 19 Aug 2015 U.S.-listed WuXi PharmaTech has finalised a $3.5 bln takeover. Given China’s slumping stock market and slowing economy, persuading investors to put up $2 bln in fresh equity is impressive. There’s still hope for some of the two dozen other Chinese companies seeking to delist.
Apple’s China challenge is real but misunderstood 17 Aug 2015 Worries about the economy, the yuan and market-share losses have cut 12 pct off Apple’s value since late July. The iPhone is no longer China’s top-selling handset. But that matters less than Huawei’s new pursuit of similar high-end customers. That’s a problem in a fickle market.
Edward Chancellor: The cost of China’s devaluation 17 Aug 2015 Forget about currency wars and global deflation. The true impact of the yuan’s sudden decline will be felt by China’s dysfunctional credit system, where domestic borrowers and foreign lenders believed the currency could only appreciate.
China’s currency could fall another 5 percent 13 Aug 2015 The central bank says it’s not out to weaken the yuan. But to recoup China’s competitiveness without slipping into deflation, a slide to at least 6.75 to the dollar would be welcome. That could help the mainland, but would give the rest of the world a new headache.
Lenovo turnaround will take more than cost-cutting 13 Aug 2015 The electronics group will slash $1.35 bln from annual expenses after falling PC sales and slowing smartphone demand halved its quarterly earnings. That may halt losses at the Motorola unit Lenovo bought for $2.9 bln last year. But any return to growth depends on a demand pickup.
Alibaba’s golden-child status hangs by a thread 12 Aug 2015 The Chinese e-commerce group’s disappointing quarterly revenue growth pushed the shares close to last year’s float price. Investors haven’t much challenged founder Jack Ma’s free rein so far. A weakening business and over $100 bln of lost market capitalisation may change that.
China’s yuan devaluation push looks far from done 12 Aug 2015 The central bank weakened the official exchange rate by another 1.6 pct against the U.S. dollar. It’s a clear sign the new “market-oriented” yuan is heading down. Until China uses its foreign exchange hoard to prop up the currency, investors will assume there’s further to go.
China trips up Fed-fixated traders 11 Aug 2015 Jolted by the unexpected slide in the yuan, stocks fell and Treasuries rose. But what next? A proper response all depends on whether Beijing plans a bigger depreciation of its currency. When U.S. policy rates will rise is no longer the only guessing game in town.
Sliding yuan lays bare uselessness of FX markets 11 Aug 2015 The scramble to parse the currency’s 2 pct devaluation signals a bigger issue. Exchange rates are expected to do too much work, as a tool, an indicator and a trading opportunity. A less variable market, similar to the old Bretton Woods system, could be helpful to everyone.
China currency move reflects realism over idealism 11 Aug 2015 A surprise 1.9 percent devaluation of the yuan won’t have much effect on the real economy, but may show willingness to help exports through a cheaper currency. To unwind global imbalances, the yuan really needs to be stronger. China just isn’t yet ready to take that medicine.
Yuan devaluation raises currency war anxiety 11 Aug 2015 China’s central bank weakened its currency by almost 2 pct against the U.S. dollar in what it called a “one-time correction.” A deflating mainland economy may justify further depreciation. That would put pressure on other countries, raising the risk of tit-for-tat moves.