Case study: Li-Ning lost out to foreign rivals in China

June 17, 2013 4:56 pm

Case study: Li-Ning lost out to foreign rivals in China

By Hellmut Schütte, Sumelika Bhattacharyya and Jocelyn Probert

The story

Gymnast Li Ning became a Chinese hero in 1984 when he won six medals at the Los Angeles Olympics, the country’s first appearance at a summer games in 32 years. By 1990 he had set up his own sportswear company, Li-Ning. It was an immediate hit, and in 1999 the company’s revenues in China reached Rmb700m, more than twice Nike’s Rmb300m and Adidas’s Rmb100m.

The challenge

The growing spending power of China’s middle-class consumers and their appetite for foreign brands, combined with the surging popularity of basketball and football – with which Nike and Adidas were associated – helped the two overseas companies win more sales in China than Li-Ning. Read more of this post

Myanmar’s old friend China is left wondering where it went wrong; President Thein Sein said he personally despises Beijing’s influence over its smaller, poorer neighbour

June 17, 2013 1:04 pm

Myanmar’s old friend China is left wondering where it went wrong

By Jamil Anderlini in Naypyidaw

In the surreal Burmese capital Naypyidawit’s hard to miss the gleaming convention centre built by a Chinese state-owned construction company and donated to the military junta a few years ago in a gesture of bilateral amity.

But earlier this month, as more than 900 executives from across the globe gathered in the complex for Burma’s first ever World Economic Forum, the Chinese presence was conspicuously absent. According to the official WEF list, only 16 participants were from mainland China.

For decades after the founding of the People’s Republic, American foreign policy was obsessed by the question of “who lost China?” Read more of this post

Samsung’s Kitchen ambition; Can the Korean electronics giant pull a smartphone-like win in the home?

Samsung’s Kitchen ambition

June 17, 2013: 10:25 AM ET

Can the Korean electronics giant pull a smartphone-like win in the home? 

By Stephanie N. Mehta, deputy managing editor

FORTUNE — Can Samsung Electronics conquer kitchen appliances in the same way it has conquered televisions and smartphones?

The Korean tech conglomerate, already the market leader in sales of TVs and mobile phones with advanced computing capabilities, says it also aims to be the world’s No. 1 purveyor of home appliances by 2015. That’s a lofty goal considering that today it is the No. 5 player in refrigerators and automatic washer/dryers, according to market share data from Euromonitor International, and isn’t in Euromonitor’s top 5 in dishwashers, ovens or microwaves.

But Boo-Keun Yoon, co-CEO of Samsung Electronics, believes the company can win over global consumers by bringing innovation and a high-tech approach to refrigerators, ovens, air conditioners, and washing machines. “These are products that consumers are very emotional about, but there’s a lot of room for innovation in home appliances.” Yoon says. Read more of this post

How big companies can beat the patent chaos of India

How big companies can beat the patent chaos of India

June 17, 2013: 1:59 PM ET

There are several companies that are doing well in India by adapting to the market instead of the other way around.

By Ravi Venkatesan

FORTUNE — Multinational pharmaceutical companies agree on one thing — that India is one of the hardest places in the world for Big Pharma to compete thanks to price controls, compulsory licensing of drugs, poor intellectual property protection, and a host of capable generic competitors.

The recent decision by India’s Supreme Court to deny patent protection to Novartis (NVS) for a reformulated version of an anticancer drug has just added more fuel to the fire, provoking drug companies and the U.S. Chamber of Commerce to unleash angry warnings that it would cut off investment to the world’s most populous democracy and ultimately limit access to lifesaving medications. The judgment adds to a growing list of trade tensions between India, the U.S., and Europe at a time when India desperately needs more foreign investment to restart its slowing economy. Read more of this post

Korea rising: From rags to riches

2013-06-17 20:33

Korea rising: From rags to riches

This is the final of a 10-part series of Korean history from its mythological, ancient beginning until the present day. This project is sponsored by several companies and public agencies including Merck Korea, eBay Korea, Daewoo Securities and Korea Post. ― ED.

By Kim Tae-gyu and Kevin N. Cawley
The end of World War II on Aug. 15, 1945 brought about the independence of Korea after 35 years of brutal Japanese colonial rule. However, the initial euphoria of the people did not last long.

Against the will of the Korean people who sought to have their own government ruling the entire Korean Peninsula, a United Nations arrangement led to its division along the 38th parallel ― a demarcation that lasts until today. Read more of this post

Abenomics for Women Undermined by Men Dominating in Japan

Abenomics for Women Undermined by Men Dominating in Japan

By Isabel Reynolds and Takashi Hirokawa – Jun 17, 2013

Japanese Prime Minister Shinzo Abe has vowed to elevate the role of women in the world’s third-largest economy. He might start with his own party.

Abe called for women filling 30 percent of senior positions in all parts of society by 2020, in an April 19 speech showcasing his growth strategy. Now, his Liberal Democratic Party is fielding nine female candidates out of 79 for next month’s election to the upper house of parliament — about 11 percent. Read more of this post

Spain’s high-speed trains and abandoned stations

Published: Tuesday June 18, 2013 MYT 8:47:00 AM

Spain’s high-speed trains and abandoned stations

ONBOARD MADRID-ALICANTE HIGH-SPEED TRAIN: A one-track dirt road used by local farmers is the main access to a magnificent glass-and-steel train station in the small city of Villena, on Spain’s latest high-speed rail route.

It is a spanking new 4,500 square meter building – essentially in the middle of nowhere.

The central government financed the rail route, inaugurated on Monday, between Madrid and Alicante on the Costa Blanca. The Valencia regional government was supposed to fund works to connect it to the nearby motorway and Villena, home to 35,000.

But it ran out of money, leaving the station high and dry. Read more of this post

Bond stampede fear spurs race for reform

June 17, 2013 5:53 pm

Bond stampede fear spurs race for reform

By Stephen Foley, Vivianne Rodrigues and Tracy Alloway in New York

If there is one thing that keeps bond investors awake at night, it is the fear of a stampede for the exit. And for good reason: there could be a pile-up in the doorway, leading to extreme market swings. After the scares of the past month, the race is on to find ways to improve liquidity in the bond market, where, unlike stocks, it can often be tricky to find buyers and sellers. Ben Bernanke, Federal Reserve chairman, is expected this week to try to undo some of the concerns about a disorderly rise in interest rates, which he triggered in May with talk that the US central bank may begin to taper its monetary stimulus. That led to a run-up in market rates and record weekly outflows from fixed-income funds. Read more of this post

Private equity exits hit by economic uncertainty

Private equity exits hit by economic uncertainty

7:20am EDT

LONDON (Reuters) – The rate at which private equity firms exited their European investments slowed last year, a study showed on Monday, as economic uncertainty hit both new stock market listings and merger activity.

Ernst & Young (E&Y) found in 2012 there were just 61 exits from Europe-based businesses which had an enterprise value of more than 150 million euros ($200.1 million) at the time private equity made its investment, down from 85 exits in 2011. Read more of this post

Investors doubt U.S., European governments can cut debts by 2016: poll

Investors doubt U.S., European governments can cut debts by 2016: poll

11:23am EDT

By Clare Hutchison

LONDON (Reuters) – Governments in the United States and Europe will not be able to significantly cut their debts in the next three years, a large majority of investors believe, according to a poll published on Monday.

Almost 90 percent of investors did not see European governments making significant progress in reducing their debts by 2016, the poll found.

Similarly, more than two thirds doubted President Barack Obama’s administration could make a big difference to debt levels in the next three years, according to the survey published by Principal Global Investors and UK think tank CREATE-Research. Read more of this post

Mining Firms Face New Scrutiny From Regulators Amid Deal Probes

Mining Firms Face New Scrutiny From Regulators Amid Deal Probes

For an industry that routinely makes multi-billion dollar deals with developing-world governments and an array of sometimes controversial leaders, the mining sector has been remarkably free of political scrutiny.

No longer. World leaders gathering in Northern Ireland for the Group of Eight summit beginning today have mining transactions and companies in their cross hairs. They are proposing tighter oversight by requiring companies to disclose all payments made to foreign governments. The new rules, aimed at exposing corruption, come as U.S. and British regulators probe mining companies including Eurasian Natural Resources Corp. (ENRC) and a firm backed by Israeli billionaire Beny Steinmetz. Read more of this post

Shale Drillers Squeeze Costs as Era of Exploration Ends

Shale Drillers Squeeze Costs as Era of Exploration Ends: Energy

The pioneers of America’s shale gas and oil revolution have done their work. Now it’s time for the factory crews to take over.

After spending $53 billion on a land binge to find hydrocarbons, the petroleum industry is counting on technological innovations — better imaging data, speedier and longer horizontal drilling, among them — to ramp up the flow of oil and gas from U.S. shale fields where they’re drilling more than 10,000 wells a year.

The techniques are embraced by the biggest producers from shale such as Chesapeake Energy Corp (CHK). and Newfield Exploration Co (NFX). to boost shareholder returns by shifting money from exploration, which is winding down, into what’s known in industry parlance as manufacturing. The moves will help producers increase profit at a time shareholders are ousting executives and revamping boards because of poor performance. Read more of this post

Siemens Will Shut Solar Unit as It Loses $1 Billion in Two Years

Siemens Will Shut Solar Unit as It Loses $1 Billion in Two Years

Siemens AG (SIE) will close its solar power unit after failing to find a buyer and losing at least 784 million euros ($1 billion).

About 280 workers will be affected by the closure, which will be completed once Munich-based Siemens has finished projects including in Spain, spokesman Torsten Wolf said by telephone. The shuttering will cost a “double-digit million-euro” sum, he said.

It “has become evident that, due to the increasingly difficult market situation, we will not find an investor for this business,” Wolf said. “We had negotiations with a number of interested parties but no agreement could be achieved.” Read more of this post

SocGen Sees More Gold ETP Sales, Lower Price on ‘Paradigm Shift’; “We would expect large-scale gold selling from investors who bought gold as a hedge against medium-term inflation.”

SocGen Sees More Gold ETP Sales, Lower Price on ‘Paradigm Shift’

Gold holdings through exchange-traded products will probably drop another 285 metric tons this year as prices fall further on speculation the U.S. economic recovery will mean less stimulus, Societe Generale SA said.

Prices will average $1,200 an ounce in the fourth quarter, compared with $1,386.47 now, the bank said in report today. It previously forecast a drop to $1,375 by the end of the year, before the metal slid into a bear market in April. A “sharp” price-drop could spur a “big increase” in producer hedging, or sales of future production, according to Societe Generale. Read more of this post

FT: Fed likely to signal tapering move is close

June 17, 2013 6:59 pm

Fed likely to signal tapering move is close

By Robin Harding in Washington

Ben Bernanke is likely to signal that the US Federal Reserve is close to tapering down its $85bn-a-month in asset purchases when he holds a press conference on Wednesday, but balance that by saying subsequent moves depend on what happens to the economy.

The Fed chairman has a double communications problem. Markets seem reluctant to acknowledge the improvement that is leading the Fed towards a taper of QE3. But they also appear to be assuming, incorrectly, that any taper means the Fed has become less willing to support the economy’s recovery. Read more of this post

It’s Hard To Look At These Photos From Indonesia And Brazil And Not Worry About A Much Bigger Emerging Market Blowup

It’s Hard To Look At These Photos From Indonesia And Brazil And Not Worry About A Much Bigger Emerging Market Blowup

JOE WEISENTHAL JUN. 17, 2013, 8:37 PM 5,684 12

The protests in Turkey continue to dominate the attention of media, but today there were two other protests in red-hot emerging markets that warrant your attention, especially since the basic narratives are fairly similar. In Indonesia and Brazil — where governments are hoping to pursue fiscal consolidation — protests have turned violent. In Indonesia the issue is the initial driver of protests is the removal of a fuel subsidy. In Brazil, it’s over an increase in bus fares, as well as general frustration over inequality, and the money being spent on next year’s World Cup. Both — along with other emerging markets — are experiencing slowing economies, sharply weakening currencies, rising interest rates, and generally a squeeze related to both financial and structural conditions.

Read more of this post