Chairman of China Jianyin Investment Securities Jumps to Death in Beijing’s Finance Street; State-owned investment co refutes online speculation that the death was tied to heavy losses incurred by gold investments

04.18.2013 17:39

Banker Jumps to Death in Beijing’s Finance Street

State-owned investment company China Jianyin Investment Securities Co. said the chairman passed away for health problems

By staff reporter Yang Lu

(Beijing) – In an apparent suicide, a high-level executive of a state-owned investment company leapt to his death in downtown Beijing.

Wang Shiqiang, 60-year-old chairman of the board of supervisors for China Jianyin Investment Securities Co., appeared to have jumped to his death on the afternoon of April 16 from the top of the office tower that houses China Jianyin.

In an issued statement, China Jianyin said the suicide was due to personal issues in Wang’s life, refuting online speculation that the death was tied to heavy losses incurred by gold investments. It is yet unclear how much risk exposure China Jianyin has to gold futures.

The company published an obituary on its website two days later which said Wang “passed away from health problems.” Read more of this post

The detention of two bank weights in China due to murky off-balance sheet deals in the interbank market has propped expectations that the country will soon start overhauling the market

China may Soon Start Clean-up in Interbank Bond Market

04-18 15:31 Caijing

The People’s Bank of China is expected to launch a campaign to rectify interbank bond market, as soon in May

The detention of two bank weights in China due to murky off-sheet deals in the interbank market has propped expectations that the country will soon start overhauling the market which has developed at an unconventional speed for nearly two years.

Zou Yu, a Shanghai-based fund manager at Wanjia Asset Management, which oversees three bond funds, was detained and under investigation for alleged holdings of others’ bonds without transferring ownership in the interbank market, Chinese media said.

Fixed-income executive director at CITIC Securities Yang Hui was taken away by authorities after being accused of illegal deals regarding Class C bond custody, also a grey area in interbank market trading. Read more of this post

Suntech’s bond default crisis worries dim sum bond investors; Global Bio-Chem Technology Group recently failed to honor its liability for bonds issued in Hong Kong following a technical issue

Suntech’s crisis worries dim sum bond investors

Staff Reporter, 2013-04-19

The ongoing reorganization of the debt-ridden Chinese solar power company Suntech could have an adverse effect on the Hong Kong dim sum bond market, Guangzhou’s 21st Century Business Herald reports.

The dim sum bond market refers to an offshore debt capital market for bonds denominated in the Chinese currency, the renminbi.

Many investors are increasingly concerned that Suntech’s financial troubles could signal a downward trend that may also hit the issuers of their bond investments.

The biotechnology company Global Bio-Chem Technology Group recently failed to honor its liability for bonds issued in Hong Kong following a technical issue. Though the company’s assets redeemed its bonds and avoided a domino effect in the market, many investors still fear the worst. Read more of this post

China’s 2020 consumer is in a town you’ve never heard of; “I don’t save at all. Why should I?”

Insight: China’s 2020 consumer is in a town you’ve never heard of

Thu, Apr 18 2013

By Melanie Lee

ZHENGZHOU/CHONGQING, China (Reuters) – Wearing a floral brocade cardigan and toting a Huawei smartphone, Guo Qian, 22, gushes over her latest purchases on Taobao, China’s largest e-commerce platform. As an administrative worker, Guo makes only 3,000 yuan a month and spends most of it.

Not only does she spend nearly all of her own money, Guo also fritters away most of her father’s 1,000 yuan monthly pension on trinkets and clothes on Taobao. “Sometimes I feel guilty using his money, so I buy him some clothes.”

Guo, a Zhengzhou native, already owns an apartment – her parents helped finance the purchase last year – and is on the upward climb to join China’s burgeoning middle class.

As Beijing tries to engineer a crucial macroeconomic shift– toward more consumption and less investment, the crucial “rebalancing” China’s new leadership is committed to, and the rest of the world is counting on — it is young consumers like Guo Qian who may hold the key to the transition.

Raised in an era of unprecedented prosperity, Guo, like many other members of what is known as the `post-80s’ generation (anyone born after 1980) has a very different answer than her parents when it comes to a central economic question: whether to spend the money she has, or save it?

“I don’t save at all,” she told Reuters. ” Why should I?” Read more of this post

Thailand’s Farmer-Friendly Rice Subsidy Backfires; The Thai government is sitting on a loss of at least 80 billion baht because of the generous price it’s paying Thai farmers for rice

Thailand’s Farmer-Friendly Rice Subsidy Backfires

By Bruce Einhorn on April 18, 2013

Until last year, business was good for Charoen Laothamatas, the president of Thai rice exporter Uthai Produce. With Thailand dominating the global market for rice exports, Uthai enjoyed strong demand. In 2012, though, Charoen had to cut his workforce by 40 percent. The culprit: a Thai government policy that pays local farmers vastly inflated prices for their rice. While the government sees the program as a way to boost rural incomes, the policy has made Thai rice uncompetitive against rice from Vietnam and India. Before the new policy went into effect, Uthai exported 200,000 tons to the U.S., China, and Hong Kong. This year, he says, “we will be lucky if we get 80,000.”

Charoen’s troubles are related to the political challenges the kingdom has endured since a military coup ousted populist Prime Minister Thaksin Shinawatra in 2006. The current premier is his sister, Yingluck Shinawatra, and in 2011 she decided an easy way to cement her party’s grip on power was to win over farmers by paying above-market prices for their rice. “I earn more and have higher savings thanks to the program,” says Groon To-Chai, a 67-year-old farmer from Nakon Sawan province in central Thailand who says his monthly income has jumped by 50 percent, to 30,000 baht ($1,000). At $571 per metric ton, Thai rice is now much more expensive than Vietnamese and Indian rice. Read more of this post

Trading houses go cool on commodity prices. And trading house executives believe the latest decline in prices has some way to run.

April 18, 2013 6:18 pm

Trading houses go cool on commodity prices

By FT Reporters

For the head of one of the world’s biggest commodity trading houses, Ernest Hemingway nailed the state of agriculture markets with his description of Switzerland: “a small, steep country, much more up and down than sideways.” Alberto Weisser, chief executive of Bunge, told the FT’s Global Commodities Summit in Lausanne this week this was particularly true of the last five or six years. The prices of many basic foodstuffs have gyrated sharply. Indeed, right now almost all commodity markets, including agriculture, are headed swiftly down the mountain slopes. And trading house executives believe the latest decline in prices has some way to run.

Read more of this post

Chinese President Xi Jinping’s Taxi to Nowhere

Xi Jinping’s Taxi to Nowhere

Beijing’s taxi drivers are most notable for two characteristics. First, they know and love their politics. Rightly or wrongly, they tend to consider themselves among the city’s most astute analysts of what’s happening behind the Communist Party’s many closed doors. Second, they have an almost supernatural capacity to recognize gullible passengers whom they can plunder with longer-than-necessary rides (while telling tales of the city’s powerful).

Thus it comes to pass that Guo Lixin, formerly an anonymous Beijing cabbie, set off a Chinese media firestorm on Thursday in China by fooling two of the Communist Party’s most prominent media outlets into believing that Chinese president Xi Jinping waved down his taxi for a ride to a hotel.

As recounted by Guo to the Ta Kung Pao newspaper (the story has since been deleted), the Chinese Communist Party’s mouthpiece in Hong Kong, Xi, accompanied by an unidentified man (a guard perhaps), waved down Guo’s taxi far from his official residence on March 1. He didn’t identify himself, but rather, like any other civic-minded Beijinger, chatted with the driver about the ever-present smog. Read more of this post

Heavily indebted companies are going public at the fastest clip in years

April 18, 2013, 8:06 p.m. ET

IPO Investors Conquer Fear of Debt

By TELIS DEMOS And MATT JARZEMSKY

Debt is no longer a four-letter word among investors in initial public offerings.

Heavily indebted companies are going public at the fastest clip in years, as low interest rates ease buyers’ fears about the prospects for stocks whose issuers are burdened with IOUs. Read more of this post

Credit Crunch Broadens European Business Rifts; large swaths of European small and midsize businesses—which employ three-quarters of the euro zone’s workers—have received precious little of this €1 trillion liquidity

Updated April 18, 2013, 9:16 a.m. ET

Credit Crunch Broadens European Business Rifts

By DEBORAH BALL And ILAN BRAT

Central banks around the world are flooding the market with liquidity in order to spark growth in the global economy. But that hasn’t helped Spaniard José Blasco. Banks have cut credit lines to Mr. Blasco’s sofa-bed maker Confortec SL to €100,000 ($131,000), compared with €500,000 several years ago. And while the Spanish state now borrows at around 5%, the 22-employee company would need to pay as much as 14% to get a bank loan—an option Mr. Blasco rejected. Over the past three years, the European Central Bank has pumped €1 trillion of cheap loans into the euro zone’s financial system, helping shore up banks and sending government borrowing rates spiraling downward. Yet large swaths of European small and midsize businesses—which employ three-quarters of the euro zone’s workers—have received precious little of this liquidity. And instead of reviving growth, the money has deepened the fault lines that separate Northern and Southern Europe, as well as big companies and small ones. “The financial system is not working, and financing is like any other raw material for industry,” Mr. Blasco says. “It’s not fair. Companies are paying for the mistakes of politicians and the financial system.”

Read more of this post

When Gold And Stocks De-Correlate: The last time the commodity/USD relationship broke down to such an extent was just ahead of the 2008 equity market decline

When Gold And StocksDe-Correlate

Tyler Durden on 04/18/2013 13:40 -0400

The structural collapse in paper gold prices has been met a seeming ‘money-on-the-sidelines’ flourish of investors looking to buy the physical asset. However, when asset relationships break-down so significantly, as gold and stocks have in the past 90 days, one has to take a step back and think “what changed?” As the chart below shows, the last time the correlation between stocks and gold was this negative, things did not end so well for the high-valuation equity momentum chasers… And just for fun, from Barclays’ Jordan Kotick, the last time the commodity/USD relationship broke down to such an extent was just ahead of the 2008 equity market decline.

Li Ka-Shing’s Striking Port Workers Lose Jobs as Protest Widens

Li Ka-Shing’s Striking Port Workers Lose Jobs as Protest Widens

Some port workers at Li Ka-shing’s Hong Kong terminals were told they will lose their jobs, as a three-week strike over wage demands at the world’s third-biggest container port escalates.

Global Stevedoring Service Co., one of the contractors which employs the workers, said today it’s unable to meet the wage demands or continue operations because three quarters of its staff are on strike.

“This is one of the worst scenarios we had expected when the strike was started,” said Cheung Chi-ming, 52, a stevedore who works for another contractor. “I’ll have to continue fighting as we have no way out.”

Dozens of the workers have pitched tents surrounding Li’s 70-story Cheung Kong Center in the business district after a protest march yesterday as government mediators struggled to narrow the differences. The strike, which prompted shipping lines to divert vessels to Shenzhen, China, from the city’s harbor, is the biggest revolt against the 84-year-old Li, who is Asia’s richest man and is nicknamed “superman” by the local media for his investing prowess.

Contract workers of Li’s Hongkong International Terminals Ltd. were offered a 7 percent raise by their employers, the company said in an e-mail yesterday, compared with the demand for a 23 percent increase. Read more of this post

McDonald’s Japan to Boost Burger Price First Time Since 2008 by much as 25 percent next month

McDonald’s Japan to Boost Burger Price First Time Since 2008

McDonald’s Corp. (MCD)’s Japan business will raise some prices by much as 25 percent next month, the fast food chain’s first increase on burgers in the country since 2008.

Hamburger prices will go up to 120 yen from 100 yen and cheeseburgers will rise to to 150 yen from 120 yen in Japan in May, McDonald’s Holdings Co. Japan Ltd. said in a statement today. The hikes are part of the company’s plan to boost profitability, it said.

McDonald’s is raising the prices after the Japanese unit reported a 12 percent drop in operating profit last year. Fewer discounts drove March same-store sales 3.6 percent lower at the local business, the 12th consecutive monthly decline. Read more of this post