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Hopes Dim for Southeast Asia Single Market by 2015

Hopes Dim for Southeast Asia Single Market by 2015

By MARTIN VAUGHAN

Bandar Seri Begawan, BRUNEI—Southeast Asia’s bid to create a single market by 2015 has bogged down, slowed by domestic political pressures in the bloc’s largest economies and alternative trade initiatives competing for policy makers’ energy and attention.

As leaders of the 10-member Association of Southeast Asian Nations gather here Wednesday, analysts say they are well behind on their goal to eliminate barriers to the free movement of goods, services and workers, with the target date just 18 months away. Read more of this post

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China May Rethink Electric-Car Push; Buffett’s BYD, which prides itself as being the champion of electric cars in China, acknowledges change is coming

China May Rethink Electric-Car Push

By YOREE KOH And COLUM MURPHY

SHANGHAI—Some of the world’s largest car makers including Germany’sVolkswagen AG VOW3.XE +3.38% and Toyota Motor Corp. 7203.TO -0.72% are using this month’s Shanghai auto show to send a message to Chinese policy makers: Wake up from your electric dreams.

The big auto makers are introducing gasoline-electric vehicles and promising to build components for the vehicles here in a bid to win greater government backing for the technology amid weak demand for purely electric-powered cars.

“There is a discrepancy between the general targets and the general goals of the government and the present situation,” said Jochem Heizmann, head of Volkswagen in China. “For the next 10 years, generally plug in hybrids have a much better chance to become a relevant volume in comparison to just fully electric cars,” he added.

Toyota unveiled its new hybrid Yundon-Showanchin II, which was developed specifically for China. Toyota Chairman Takeshi Uchiyamada, known as the father of the company’s most popular hybrid Prius, said on Saturday that as China’s auto market grows “hybrid vehicles without a doubt will become a necessity.” Toyota plans to start locally producing key hybrid components by 2015. Read more of this post

Preparing Statement of Cash Flows from Taoist Perspectives

Preparing Statement of Cash Flows from Taoist Perspectives

Yu-Je Lee Takming University of Science and Technology

Jie He Qing Hai Province, Department of Finance

Mei Fen Wu National Taiwan University of Science and Technology

Ying Qing Li Guangzhou Hengyun Enterprises Holding, Ltd.

Ching Ho Chen Jinan University

April 7, 2013
Journal of Business & Management, Vol. 1, No. 2, April 2013

Abstract: 
The preparation of cash-flow statement under the indirect method involves adjustments of many items. This is a highly complex process prone to errors, due to a lack of philosophical guidance. This paper finds that the concept of natural equilibrium of Chinese Taoism “…is the way of heaven to take from what has in excess in order to make good what is deficient…” can lend intellectual support to the preparation of cash flows statement under the indirect method. This approach will greatly enhance the accuracy of cash flows statement under the indirect method. This paper uses examples to illustrate the process of adjustments in the preparation of cash- flow statement under the indirect method in the context of Taoist philosophy. The results show that the philosophical perspectives of Chinese Taoism can provide strong guidance on these adjustments by achieving both efficiency and efficacy. The assurance of this “win-win” is a testimony to the philosophical contents of Taoism in the context of modern times.

Estimating the Extent of Propping in China and How It Is Affected by the Controlling Shareholder’s Capture of Directors and Executives

Estimating the Extent of Propping in China and How It Is Affected by the Controlling Shareholder’s Capture of Directors and Executives

Maggie Williams RMIT University

Dennis William Taylor RMIT University

January 11, 2013
2013 Financial Markets & Corporate Governance Conference

Abstract: 
Research on the phenomenon of propping up a firm’s earnings or liquidity by its controlling shareholders through related-party transactions (RPTs) has suffered from arbitrary and unsettled measures of the ‘propping’ variable and a lack of theoretically underpinning. This study’s first objective is to develop a new measure of propping based on an estimation of the proportion of propping embodied in total related-party transactions. By invoking Jensen and Ruback’s (1983) theory of ‘market for ownership control’, the propping component is estimated from prevailing conditions that can trigger a market for ownership control of a firm or shield its controlling shareholders from this market. Using this theory-based estimate of the extent of propping by a firm, the second objective of this study is to investigate the extent to which controlling shareholders are able to capture directors and top executives in order for the firm’s board governance to facilitate the carrying out of propping transactions. Models are developed and empirically tested in the context of listed companies and securities regulations in China. Using the CSMAR database for the year 201’8 all companies with complete data on the Shanghai and Shenzhen Stock Exchanges are sampled. Results reveal that the key factors deemed to create a market for ownership control – namely, lower State (and State legal person) ownership, greater risk of penalty by the securities regulator and a weaker cushion of non-tradeable shares – are significant conditions affecting total RPTs. The regression coefficients of these factors provide the estimate of the propping component in total RPTs. Over the whole sample propping is found to be approximately 1.5% of total RPTs. This propping measure is then modelled as the dependent variable, and regressed against governance factors that are proxies for the extent of ‘capture’ by controlling State shareholders of directors, supervisors and top executives. The results reveal that the extent of propping is significantly positively affected by the extent of directors’ shareholdings in the firm and the top 3 executives’ emoluments. This paper establishes a new measurement approach that can be adopted in future studies on the phenomenon of propping. It also has practical implications for minority shareholders and prospective investors in terms of developing a firm-level ‘propping’ index and providing a better understanding of how controlling shareholders can ‘capture’ directors and executives to facilitate propping transactions.

Buffett Challenger Kass Prepares For Meeting, Munger Test

Buffett Challenger Kass Prepares For Meeting, Munger Test

Douglas Kass, the investment manager selected by billionaire Warren Buffett to ask questions at Berkshire Hathaway Inc. (BRK/A)’s annual meeting next week, has hit the books in preparation for the challenge.

The fund manager said in an interview yesterday that he’s reading Alice Schroeder’s more-than-800-page biography of Buffett and other titles to get ready for the May 4 gathering in Omaha, Nebraska. It’s taken about 10 hours on average for each question, he said by phone.

“We can’t lose sight that this company, and Mr. Buffett as a person, has been combed over with questions,” said Kass. “It’s not like this is a breeze. I think he expects something of me, and I don’t want to disappoint him.”

Buffett, 82, has sought to refocus attention at the meeting on Berkshire by allowing journalists and analysts to alternate with the audience in asking questions of him and Vice Chairman Charles Munger. Kass, founder of Seabreeze Partners Management Inc., answered Buffett’s call to change the panel by adding an investment professional who’s betting on the stock’s decline.

“He wanted to spice up the annual meeting, and to make it more interesting from the context of the questions, as opposed to a bunch of softballs or non-Berkshire-related political questions, tax questions, policy questions,” Kass said. Read more of this post

Barrick Gold at 20-Year Low Turns to Thornton

Barrick Gold at 20-Year Low Turns to Thornton

April 23 (Bloomberg) -– Barrick Gold Corp. (ABX) founder Peter Munk sees a successor in former Goldman Sachs Group Inc. (GS) President John Thornton as the world’s biggest gold miner tries to reverse a 54 percent plunge in market value in the past year.

“I searched the world for a successor,” Munk, the 85- year-old chairman of Barrick, said yesterday in an e-mailed statement. “I am delighted I found John. I am confident he will take Barrick to a new level as a global player.”

Thornton, 59, faces his first annual shareholders’ meeting tomorrow as co-chairman after the Toronto-based miner has struggled with cost overruns, writedowns, and opposition to his $11.9 million signing bonus from shareholders including Canada’s six largest pension fund managers. Read more of this post

Wealthiest Americans Only Winners in Recovery, Pew Says. The recession continues for almost everyone else. “The results are entirely sensible, but depressing”

Wealthiest Americans Only Winners in Recovery, Pew Says

The U.S. economy has recovered for households with net worth of $500,000 or more, a new study shows. The recession continues for almost everyone else.

Wealthy households boosted their net worth by 21.2 percent in the aftermath of the recession, according to the study released today by the Pew Research Center. The rest of America lost 4.9 percent of household wealth from 2009 to 2011.

Pew attributed the disparity to gains during that period in the stock and bond markets, benefiting affluent households, while the housing market’s decline hit others harder. The report underscores the nation’s growing income inequality, with the top 13 percent of households recovering their losses from the 18- month recession that ended in June 2009, and the rest of the country continuing to hemorrhage wealth.

“The results are entirely sensible, but depressing,” said Richard Fry, a Pew senior research associate and co-author of the study by the Washington-based organization. “It’s a stark story of two Americas.” Read more of this post

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