Emotions High Over ParknShop Sale Talk; Superman Li Ka-Shing may have been influenced by the city’s pivot away from its traditionally laissez-faire stance

July 23, 2013, 11:27 AM

Emotions High Over ParknShop Sale Talk

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As a deeply unequal city, Hong Kong both reveres and fiercely resents its local boy-made-good Li Ka-shing, who from his early days running a plastic flower business has since built up an empire worth some $120 billion. Nowhere was this more evident this week than in reactions to the fact that the tycoon may be planning to sell ParknShop, his Hong Kong-based grocery chain.

News that Asia’s richest man is planning the sale prompted mixed reviews in his hometown on Monday, attracting full-page spreads in local newspapers. While some celebrated the move, others expressed apprehension. “The rich are scared, and once again using their feet to vote,” wrote one user on Sina Weibo, China’s popular Twitter-like microblogging service. “The hatred of the rich and their businesses has been spreading…of course it will disrupt the appetite for investment,” ran an editorial in the Hong Kong Commercial Daily. Read more of this post

Large Loans Are Highlight of Mediocre Asian Deal Environment

Jul 22, 2013

Large Loans Are Highlight of Mediocre Asian Deal Environment

By Cynthia Koons, Reuters

One thing stands out in Asia’s uninspiring deal landscape this year: big loans. Acquisition financing in Asia, excluding Japan, has hit its highest year-to-date level since 2007, up 46% from the same period last year, according to Dealogic. That is despite acquisitions rising only 3% this year after a slowdown in recent months. Now as investors pull cash out of Asia in the belief that the U.S. Federal Reserve will soon start winding down its monetary stimulus, some people are saying this wave of debt-fueled deals could soon end. “I don’t think I would stand and wave my hand at this point in time and say, ‘This is the new normal,’ ” said Keith Pogson, a partner in Ernst & Young’s Asian-Pacific financial-services office. Read more of this post

Singapore’s Loss of Top MBA Program Threatens Education Ambition; “There is no doubt that Hong Kong provides a more dynamic vibrancy in Asia than Singapore does”

Singapore’s Loss of Top MBA Program Threatens Education Ambition

Singapore’s efforts to become an Asian center for higher education was dealt a blow this month when the school with the top-ranked MBA program said it will relocate to Hong Kong.

The University of Chicago, whose executive MBA program was ranked No. 1 by Bloomberg Businessweek last year, said July 10 it’s relocating to be closer to China. That came after New York University’s Tisch School of Arts and the University of Nevada, Las Vegas said there are plans to close their Singapore campuses in the next two years. Read more of this post

Alibaba Billionaire Jack Ma’s Comment Fallout Shows Fine Line on Politics

Billionaire Ma’s Comment Fallout Shows Fine Line on Politics

The fallout from comments attributed to Jack Ma about the 1989 Tiananmen Square crackdown highlights the balance business leaders need to strike in China between pleasing politicians and showing independence.

After the South China Morning Post newspaper quoted Ma as saying China’s rulers made the “most correct decision” in their handling of the deadly June 4, 1989, protests, activists started an online petition calling for an apology. The billionaire’s company, Alibaba Group Holding Ltd., disputed the accuracy of the report, which the newspaper said it stands by. Read more of this post

Hong Kong Says Loans to Mortgage Companies May Undermine Curbs

Hong Kong Says Loans to Mortgage Companies May Undermine Curbs

Hong Kong banks’ support for mortgage lending by finance companies may reduce the effectiveness of home-lending controls, the city’s banking watchdog said.

“If banks provide loans to finance companies to support their mortgage business and these finance companies do not follow the Hong Kong Monetary Authority’s guidelines on property mortgage lending, this may undermine the effectiveness of the prudential measures,” the regulator said in an e-mailed statement yesterday. The HKMA “does not encourage banks to provide loans to these finance companies,” it said. Read more of this post

MillerCoors Sees Metal-Warehouse Delay Costing Buyers $3 Billion

MillerCoors Sees Metal-Warehouse Delay Costing Buyers $3 Billion

Global aluminum costs were inflated by $3 billion in the past year through unfair rules that allow Goldman Sachs (GS) Group Inc. and other warehouse owners to slow deliveries, said a risk executive at brewer MillerCoors LLC.

The practices of warehouse owners authorized to hold aluminum by the London Metal Exchange created artificial limits on available supply, leaving prices “inflated relative to the massive oversupply and record production,” Tim Weiner, a global risk manager at Chicago-based MillerCoors, said in written testimony before his appearance today at a U.S. Senate subcommittee hearing in Washington. Read more of this post

Mandela’s Wealth-Sharing Dream Fades in South Africa

Mandela’s Wealth-Sharing Dream Fades in South Africa

Prudence Moime looks up from stirring a pot of corn meal in front of her two-room shanty in northeastern South Africa and gazes across the surrounding rocky hillside. Just beyond her view lie some of the world’s best platinum deposits.

She says she waits in vain for some of the money promised to her village by African Rainbow Minerals Ltd. (ARI), part-owned by Patrice Motsepe, the richest black South African and a beneficiary of the country’s policy to spread the wealth to blacks after the end of apartheid. Read more of this post

Corporate fraud specialists say using travel agencies, and marketing or consulting firms, to launder money, embezzle or create slush funds to bribe officials is common in China, even at MNCs

July 21, 2013

Files Suggest a Graft Case in China May Expand

By DAVID BARBOZA

SHANGHAI — A few weeks ago, when Chinese investigators raided a small travel agency in this fast-growing city, they came upon something startling.

The agency appeared to be using fake contracts and travel invoices to help executives at the British pharmaceutical giant GlaxoSmithKline bribe doctors, hospitals, foundations and government officials, Chinese authorities said. Read more of this post

Alcoa chairman and chief executive Klaus Kleinfeld complained that China’s aluminium smelter sector is “living on a different universe”; record production despite 41% of all Chinese smelters may be financially “under water”.

Aluminium; parallel universe or the same one? Andy Home

10:11am EDT

By Andy Home

LONDON (Reuters) – China’s production of aluminium cranked up several gears last month to an annualized 22.42 million tonnes. It was the second-highest run-rate ever, eclipsed only by what may have been a holiday-distorted output figure in February.

The world’s largest producer churned out 10.54 million tonnes of the light metal in the first half of this year, according to figures from China’s Nonferrous Metals Industry Association published by the International Aluminium Institute (IAI). Read more of this post

Hotlines spring up for China VIPs to buy luxury goods amid anti-graft drive

Hotlines spring up for China VIPs to buy luxury goods amid anti-graft drive

Monday, 22 July, 2013, 12:00am

George Chen george.chen@scmp.com

Amid Xi Jinping’s anti-graft drive and the popularity of weibo, those who have something to hide prefer to do their shopping by telephone

President Xi Jinping’s anti-graft campaign may have created a new business on the mainland: serving “important people” in an extremely low-profile, or even secret, way.

I was back in Shanghai for a quick trip recently and dropped by several big shopping centres on Nanjing Road, one of the mainland’s busiest streets. Ironically, these shopping centres – and, in particular, the big luxury brand shops inside – didn’t look busy at all. They were almost empty. Read more of this post

A Reformist Chinese Leader? Stop Fooling Yourself

A Reformist Chinese Leader? Stop Fooling Yourself

By Jeffrey WasserstromJuly 22, 201313 Comments

Pedestrians walk past a billboard displaying, from left, Chinese Communist Party leaders Mao Zedong, Deng Xiaoping, Jiang Zemin and Hu Jintao at an event celebrating the 90th anniversary of the Chinese Communist Party in Beijing

For those of us who have tracked Chinese political trends since the late 1970s when Deng Xiaoping came to power, reading the news about China these days can prove strangely disorienting. One week, we’ll be struck by a slew of stories, on everything from fast trains to record growth rates, which underscore how different China is than it was when Deng first launched his reforms. The next week, though, we’ll be struck just as powerfully by a sense of eerie familiarity. Headline after headline — about the intractability of corruption, the death of a watermelon vendor or a petitioner’s desperate attempt to draw attention to this plight by detonating an explosive device at a Beijing airport — seem just like those we came across a few years or even a couple of decades ago. Read more of this post

Systemic risk over China’s mid-tier banks

Updated: Tuesday July 23, 2013 MYT 8:01:46 AM

Systemic risk over China’s mid-tier banks

BY KARIM RASLAN

Analysts have been warning on the risks of China’s “shadow banking” system – a sector estimated to have as much as RM4.15tril in assets.

RAMADAN is always a good time for reflection. This year, I’ve been researching a new TV documentary series, Ceritalah Indonesia, that I’m hoping to shoot by September. I want to tell the story of how Indonesia, having endured the Asian Financial Crisis in 1997/1998, ousted President Suharto and then launched into the tumultuous “Reformasi Era” before finding some degree of stability under President Susilo Bambang Yudhoyono. As a result, I’ve been going over recent history – including the roots of the crisis itself. Now even though I’m not an economist, it’s been a very interesting journey, especially reading about the various bank failures that sparked off and then deepened the crisis. Back then, banks seemed to be falling like dominoes: Thailand’s Finance One collapsed spectacularly. This was followed only a few months later by Bank Indonesia’s surprise decision to close sixteen banks. As the momentum gathered in intensity, one of Japan’s most important brokerage houses – Sanyo Securities was also shuttered. Read more of this post

Hasbro Games Show Signs of Life in iPad World; Hasbro has remade classic products, such as turning “Twister” into “Twister Dance” and incorporating pop music into the game, to lure a younger set accustomed to digital elements in their play

Hasbro Games Show Signs of Life in iPad World

Hasbro Inc. (HAS), the world’s second-largest toymaker, is showing signs that its games business just may thrive in an iPad world.

Sales of games such as “Monopoly” and “Magic: The Gathering” rose 19 percent to $255.4 million in the second quarter, Pawtucket, Rhode Island-based Hasbro said today in a statement. That was the unit’s third straight sales gain and reverses a 7.6 percent drop in the same period a year earlier.

Hasbro has remade classic products, such as turning “Twister” into “Twister Dance” and incorporating pop music into the game, to lure a younger set accustomed to digital elements in their play. After years of playing catch-up to Zynga Inc. (ZNGA) and others in the market for games played on Apple Inc.’s best-selling tablet, Hasbro two weeks ago acquired a stake in Backflip Studios, maker of titles such as “DragonVale” and “Paper Toss.” Read more of this post

Wall Street Commodity Trading in Jeopardy Amid Fed Review

Wall Street Commodity Trading in Jeopardy Amid Fed Review

JPMorgan Chase & Co. (JPM), Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS) are among lenders whose commodity-trading is in jeopardy as the Federal Reserve reconsiders letting banks ship oil and store metal.

The central bank, ahead of a Senate subcommittee hearing on the issue tomorrow, says it’s reviewing a decade-old ruling to let deposit-taking banks trade physical commodities. A reversal would be the Fed’s biggest exclusion of banks from a market since Congress lifted the Depression-era law against them joining with securities firms in 1999. Read more of this post

BRIC Bust Seen in Emerging Market Discontent With Growth

BRIC Bust Seen in Emerging Market Discontent With Growth

Stretched budgets and sluggish growth are putting emerging-market governments on a collision course with rising pressures from recently empowered middle classes for more spending and better services.

From Jakarta to Brasilia, policy makers face the end to an era of abundant global liquidity that helped fuel the fastest expansion in three decades. In the eight weeks through July 17, investors pulled $40.3 billion from emerging-market bond and equity funds amid signs the Federal Reserve may begin reducing stimulus later this year. In 2012, $111 billion poured into these asset classes, according to EPFR Global in Cambridge, Massachusetts, which tracks money flows. Read more of this post

SEC Warns: Prepare For Repo Defaults

SEC Warns: Prepare For Repo Defaults

Tyler Durden on 07/22/2013 21:28 -0400

As we warned here most recently, the shadow-banking system remains the most crisis-catalyzing part of the markets currently as collateral shortages (and capital inadequacy) continue to grow as concerns. In recent weeks, between The Fed, Basel III, and the FDIC, regulators have signalled the possible intent to change risk, netting, and capital rules that could have dramatic implications on the repo markets and now, it seems, the SEC has begun to recognize just how big a concern that could be. As Reuters reports, the SEC urged funds and advisers last week to review master repurchase agreement documentation to see if there are any procedures to handle defaults, and if necessary, prepare draft templates in advance. A retrenchment in repo markets is unwelcome news for the liquidity of the underlying securities. Most repos, around 80%-90%, are against government-related collateral and it is the repo market which makes government securities relatively more liquid by allowing fast and efficient financing and short covering. It is not accidental that trading volumes in bond markets are so closely related to the outstanding amount of repos. Read more of this post