Cosco Shipping Loss Triples in Latest Sign of Weak China Profits

Cosco Shipping Loss Triples in Latest Sign of Weak China Profits

Cosco Shipping Co. (600428), a listed unit of China’s biggest shipping group, said first-half net loss tripled, the latest sign that slowing growth in the world’s second-biggest economy is eroding corporate earnings.

The shipping company’s loss in the first six months was 78 million yuan ($12.7 million), widening from 23.6 million yuan a year earlier, it said in a statement to Shanghai’s stock exchange yesterday. Gold miner Zijing Mining Group Co. (2899), sportswear maker Peak Sport Products Ltd. (1968) and winemaker Dynasty Fine Wines Group Ltd. (828) are among others to report sliding profits or losses this month. Read more of this post

Heads to roll as curbs bite HK property agents; largest property agency Centaline sent letters to a staggering 1,400 of its agents – more than one-third of the total – warning they could be fired

Heads to roll as curbs bite property agents
Karen Chiu
Thursday, July 11, 2013
Property agents may face another round of layoffs as major agencies launch fresh efforts to slash costs.

Centaline Property Agency yesterday sent letters to a staggering 1,400 of its agents – more than one-third of the total – warning they could be fired as they have made deals worth less than HK$60,000 in the past six months.  Read more of this post

Glut of shopping malls in China could create realty bubble

Glut of shopping malls in China could create realty bubble

Staff Reporter

2013-07-11

Compared with the residential market, the commercial real estate market is more likely to face bubbles, a vice chairman of a Hong Kong-listed realty firm has told Shanghai’s First Financial Daily. According to real estate services company DTZ, the total floor area for new shopping malls slated to open in Shanghai during the second half of this year will reach 2.49 million square meters. In comparison, the total floor area of retail property transactions from the year 2000 to June 2013 was pegged at 10.9 million square meters. Read more of this post

Muddy Waters: Adventures Abroad Could Hurt U.S. Companies

JULY 10, 2013, 3:06 PM

Adventures Abroad Could Hurt U.S. Companies

By CARSON C. BLOCK

Carson C. Block is the director of research for Muddy Waters, an investment firm.

Analysts across Wall Street are just beginning to warn investors about trouble brewing in emerging markets. The International Monetary Fund this month downgraded its global growth forecast for the rest of 2013 and next year, citing a big slowdown in emerging market economies because of higher interest rates, asset price volatility, weaker domestic activity and currency depreciation. Read more of this post

1,000 hopeful borrowers overran a branch of China’s central bank as a rumor spread that it was handing out zero-interest loans, illustrating how Chinese financial know-how badly lags growth in banking products

China central bank office mobbed by borrowers seeking free loans

5:43am EDT

BEIJING (Reuters) – About 1,000 hopeful borrowers overran a branch of China’s central bank as a rumor spread that it was handing out zero-interest loans, media said on Thursday, illustrating how Chinese financial know-how badly lags growth in banking products.

Police were called in on Tuesday to disperse the crowd, which had gathered for days outside the central bank in Beihai in the southern province of Guangxi, the Global Times said. Read more of this post

Cash for copper in China (or whack-a-mole financing)

Cash for copper in China (or whack-a-mole financing)

FT Alphaville | Jul 10 15:06 | 13 comments | Share

Kate’s post on the June China trade data mentions that commodities imports were the only bright spot (although it’s a somewhat dubious bright spot if it indicates a resurgence in investment). It turns out that copper imports were particularly strong, recording a 9.7 per cent year-on-year increase in June, a rather large change compared to a 14.6 per cent decline in May. Goldman point us to one compelling reason why that might be the case. It’s basically another case of whack-a-mole financing in China. Hit over-invoicing over the head and up pops ‘Cash For Copper’ (CFC) financing. This differs from more traditional Chinese Copper Financing Deals in that CFC financing involves moving physical copper from offshore to onshore; and there is no circulation of warrants. But the point of the two mechanisms is the same — getting access to CNY through cheap FX funding. A CFC financing deal looks a little something like this (click to enlarge):

Read more of this post

China faces tug-of-war over growth strategy; “We can’t rule out the possibility that the situation will be different from what leaders expect and that the economy will suffer a hard landing”

July 10, 2013 12:37 pm

China faces tug-of-war over growth strategy

By Simon Rabinovitch in Shanghai

Is this the end of the ‘Beijing put’? Over the past five years whenever China’s growth slipped below 8 per cent, global investors could count on the government to unleash stimulus and re-energise the world’s second-largest economy, boosting demand for everything from Audis to iron ore.

China is now sliding toward 7.5 per cent growth and likely lower. But the country’s new leaders are refusing to ride to the economy’s rescue, as they did most spectacularly in late 2008 when the global financial crisis struck. There is virtual unanimity among analysts that China has entered an era of slower growth, and that the government, far from panicking, welcomes this change, believing it will give rise to a more sustainable economic model. Read more of this post

Byron Wien’s Firsthand Impressions of Asian Markets; “In past years there was a sense of optimism everywhere you went. Now you get a feeling of uncertainty touched by apprehension.”

WEDNESDAY, JULY 10, 2013

Byron Wien’s Firsthand Impressions of Asian Markets

By BYRON WIEN | MORE ARTICLES BY AUTHOR

“In past years there was a sense of optimism everywhere you went,” writes the Wall Street veteran. “Now you get a feeling of uncertainty touched by apprehension.”

I spent almost two weeks in Asia in June and in some ways it was an eye-opener. In past years there was a sense of optimism everywhere you went. Now you get a feeling of uncertainty touched by apprehension. My trip covered a great circle starting in Singapore and going on to Kuala Lumpur, Taipei, Hong Kong, Beijing, Seoul and Tokyo. Spending only one day in each city, my observations were more impressionistic than analytical. I talked with sovereign wealth fund managers and other major investors. Most concerns related to China’s outlook and whether the financial system there was overextended. As we all know, China is the engine of growth for the region and any problems there are felt everywhere else. In contrast to last year, Japan was also a major topic of interest. Read more of this post

Commodity Traders Face New Squeeze as Storage Congestion Spreads

Commodity Traders Face New Squeeze as Storage Congestion Spreads

Commodity traders are facing another supply squeeze as stockpiles concentrate in fewer cocoa depots, mirroring congestion at metals warehouses that means some buyers are paying record premiums for deliveries.

Warehouses in Antwerp, Belgium, held 61 percent of cocoa certified for delivery by the NYSE Liffe exchange on June 24, compared with 36 percent a year earlier, bourse data show. That mirrors the trend in metal stockpiles, with 73 percent of aluminum and 90 percent of copper tracked by the London Metal Exchange now held in three locations. Read more of this post

The panic that rippled through Asia’s markets in May and June might just be a prelude to a more serious capital flight when the U.S. Federal Reserve starts winding down its stimulus measures for real

Asian stress points unveiled as Fed tapering looms

5:07pm EDT

By Nachum Kaplan and Umesh Desai

Singapore (Reuters) – The panic that rippled through Asia’s markets in May and June might just be a prelude to a more serious capital flight when the U.S. Federal Reserve starts winding down its stimulus measures for real.

How quickly the U.S. Federal Reserve reduces its $85 billion a month of bond purchases, which keep interest rates low, will determine how quickly money is pulled out of Asia. Read more of this post

New-breed bosses rev up Indonesia’s state enterprises

New-breed bosses rev up Indonesia’s state enterprises

Wednesday, Jul 10, 2013

John McBeth

The Straits Times

SINGAPORE – Don’t say it too loudly because it might upset the bureaucrats, but over the past five years, go-ahead private sector executives have been changing the corporate culture and turning around the fortunes of a clutch of Indonesia’s state-owned enterprises.

Pertamina oil company president-director Karen Agustiawan, 54; Garuda Airlines chief executive officer Emirsyah Satar, 53; and Kereta Api national railway boss Ignasius Jonan, 49, have all made an impact on organisations previously known for their leaking budgets and tardy public service. Read more of this post

Trouble Looms for Japan’s Once-Mighty DPJ; Beleaguered Party Projected to Lose Last Grasp on Power in Upper House Race

Updated July 10, 2013, 1:26 p.m. ET

Trouble Looms for Japan’s Once-Mighty DPJ

Beleaguered Party Projected to Lose Last Grasp on Power in Upper House Race

TOKO SEKIGUCHI

TOKYO—Four years after its historic overthrow of the entrenched one-party rule of the Liberal Democratic Party, the Democratic Party of Japan is set to lose its last grasp on power with polls predicting a catastrophic loss for the beleaguered party in the coming upper house race.

The DPJ, led by Banri Kaieda is projected to lose half its 44 seats up for election in the July 21 race, according to surveys by Japan’s major dailies. The DPJ, which for now is the largest single voting bloc in the upper chamber, will be giving up its presence as the dominant opposition force, as the governing LDP-New Komeito coalition’s bicameral control of parliament all but eliminates the DPJ’s tactical recourse against the enactment of government-proposed bills. Read more of this post

Dividend Stock Investors Should Really Consider How CEOs Are Paid

MORGAN STANLEY: Dividend Stock Investors Should Really Consider How CEOs Are Paid

SAM RO JUL. 11, 2013, 7:39 AM 844 1

Adam Parker, Morgan Stanley’s Chief U.S. Equity Strategist, is on Bloomberg Surveillance with Tom Keene this morning. While discussing dividend paying stocks, Parker noted that we should consider executive compensation structures. Parker addressed this in a recent report to clients: Management teams are paying themselves more in restricted stock units (RSUs) than in options. In recent years, more CEOs of S&P 500 companies have received compensation in the form of restricted stock than as options (Exhibit 14). It is important that fundamental analysts understand how the senior management teams of the companies they are analyzing are variably compensated, as those with restricted stock and not options are much more likely to increase dividends. The principle? People rarely intentionally damage their own net worth. The shift toward equity-based compensation was designed to align executives’ interests with shareholders. However, we have to wonder if corporate decision-makers will pass up better uses of cash to enrich themselves in the form of dividends. Regardless, this decision to pay out an increasing dividend is crucial to investors. Since 1930, dividends have accounted for 42 percent of stock market investment returns.

Chateau d’Yquem ’90 Extends Decline to Lowest Level Since 2009

Chateau d’Yquem ’90 Extends Decline to Lowest Level Since 2009

A case of 1990 Chateau d’Yquem, Bordeaux’s top-ranked Sauternes dessert wine, sold for 2,700 pounds ($4,050) on the Liv-ex market yesterday, extending a 15-month drop and taking it to its lowest level since October 2009.

The wine sold for 20 percent less than the 3,380 pounds at which it traded in March last year, having peaked at 3,400 pounds in September 2011, according to data on London-based Liv-ex’s Cellar Watch website. Read more of this post

Fittings maker Grohe attracts bid interest from rivals; Grohe, which has a 8% global market share, posted sales of 1.4bn euros, EBITDA 273m euros

Fittings maker Grohe attracts bid interest from rivals – sources

1:10pm EDT

FRANKFURT (Reuters) – German bathroom fixtures maker Grohe GROH.UL has attracted bidding interest from several rivals, which have been asked to submit tentative offers by the end of next week, three people familiar with the process told Reuters.

Grohe’s owners, investor TPG Capital TPG.UL and the private equity arm of Credit Suisse (CSGN.VX: Quote,Profile, Research, Stock Buzz), are running a so-called dual track process that may alternatively result in a stock market listing of Europe’s biggest bathroom equipment maker in the autumn. Read more of this post

Brazil Signals World’s Biggest Key Rate Increase Far From Over; Brazil Raises Rate to 8.5% as Inflation Undermines Growth

Brazil Signals World’s Biggest Key Rate Increase Far From Over

Brazil’s central bank raised the benchmark interest rate a third consecutive time and said it was giving continuity to the world’s biggest tightening cycle, signaling increases may be extended through year-end as policy makers battle inflation.

The bank’s board, led by President Alexandre Tombini, yesterday raised the benchmark Selic (BZSTSETA) rate by 50 basis points to 8.50 percent, as forecast by all 51 analysts surveyed by Bloomberg. The move led Itau Unibanco to reiterate its call for a rate increase in each of the three meetings left this year. Read more of this post

Indonesia Raises Rate More Than Forecast to 6.5% on Inflation

Indonesia Raises Rate More Than Forecast to 6.5% on Inflation

Bank Indonesia raised its key interest rate more than forecast to bolster a weakening currency and ease inflation pressures after the government increased fuel prices last month.

The central bank boosted the reference rate by 50 basis points to 6.5 percent, Governor Agus Martowardojo said in Jakarta today. The outcome was predicted by three of 19 economists surveyed by Bloomberg News, with the majority expecting a 25 basis-point increase. It also boosted the deposit facility rate to 4.75 percent from 4.25 percent. Read more of this post