Starbucks and Danone team up to take on growing $7 billion US yogurt market

Starbucks and Danone team up to take on growing US yogurt market

Wednesday, Jul 24, 2013

Reuters

Starbucks Corp and Danone SA said on Tuesday they will sell a co-branded yogurt through Starbucks cafes and in grocery stores as yogurt makers and food companies battle for market share in the US$7 billion (S$.8.8 billion) US market. The partnership comes as Starbucks pushes into the “health and wellness” category and as Danone, owner of the Dannon brand, and other yogurt makers seek to conquer the US market, where yogurt consumption per capita lags Europe. Financial terms were not disclosed. Their first product will be ready-to-eat Greek yogurt parfaits, to be sold in US Starbucks stores in spring 2014. Read more of this post

Chinese Not Impressed by World’s Future Tallest Building

Chinese Not Impressed by World’s Future Tallest Building

As recently as July 1, cattle apparently grazed in the fields intended for the world’s tallest skyscraper in the rural outskirts of Changsha, in China’s Hunan province. That wasn’t the original plan: Sky City, as the concept is known, was scheduled for completion earlier this year after a mere 90 days of construction.

Understandably, few people inside or outside China believed such a deadline was possible. It wasn’t. Work never even started on the project, which was delayed in part by the government-approval process. Read more of this post

Watch revenue when parsing western vs emerging bonds

Watch revenue when parsing western vs emerging bonds

1:53am EDT

By Mike Dolan

LONDON (Reuters) – Watch governments’ revenues, and not just how much their economies produce, to see if they can support their debt piles. For investors choosing between bonds of heavily-indebted governments of recessionary European nations and those of the seemingly tidier national accounts in the fast-growing developing world, the point is increasingly poignant. For over three years at least, the decision was simple. But after months of shocks to emerging markets and their previously buoyant bond universe in particular, lots of that recently assumed wisdom has come into question. Read more of this post

Investing When Opportunities Are Limited; Ben Inker, an associate of famed investor Jeremy Grantham, argues that both stocks and bonds are overvalued. So what’s an investor to do?

TUESDAY, JULY 23, 2013

Investing When Opportunities Are Limited

By BEN INKER | MORE ARTICLES BY AUTHOR

Ben Inker, an associate of famed investor Jeremy Grantham, argues that both stocks and bonds are overvalued. So what’s an investor to do?

Editor’s Note: Jeremy Grantham has decided to take a break from his scheduled summer quarterly missive to investors. But we’re happy to share the latest commentary of Ben Inker, who works alongside Grantham at GMO, the Boston-based money management firm. A longer version of this commentary, along with charts, is available on the GMO Website.

To investors focused on U.S. equities, it may be easy to forget the investing excitement of this spring, but for others, particularly anyone running a portfolio predicated on asset class correlations being low, this has been a pretty shocking couple of months. From May 22 to June 24, the S&P 500 lost 5.6%, MSCI EAFE lost 10.1%, MSCI Emerging Markets fell 15.3%, the Dow Jones/UBS Commodity index fell 4.5%, the U.S. 10-year T-Note fell 4.4%, and the Barclays U.S. TIPS index fell 7.1%. For good measure, the J.P. Morgan Emerging Debt Global index fell 10.8%, the German 10-year Bund fell 5.2%, the UK 10-year Gilt fell 3.4%, and the Australian 10-year bond fell 6.5%. Equity markets have made a fairly sharp recovery since then, with the S&P 500 actually hitting new highs, but lots of other asset classes are still licking their wounds. In light of the generally negative correlations between stocks and bonds of the last decade, the universality of the declines looks pretty weird. For those schooled in thinking that the only “risks” that matter for investors are growth shocks and inflation shocks, it’s significantly more than just weird. To anyone of that mind, it’s a bit of a soul-searching moment, and it forces you to either treat the episode as a one-off event that will hopefully not happen again anytime soon or as a challenge that requires you to rethink your risk model. Not surprisingly, at GMO we believe it to be the latter, and that most investor risk models are missing an important piece of the puzzle. Read more of this post

Angry Birds Soda May Arrive In China Soon With Four Flavors

Angry Birds Soda May Arrive In China Soon

By Emma Lee on July 23, 2013

Roivo, developer of Angry Bird, reportedly plans to introduce Angry Birds soft drink to the Mainland China market in addition to its full product lineup ranging from t-shirts to posters (in Chinese). Angry Birds claims the soda, which currently comes in four flavors (see below), is already a hit in Finland, even outselling Coke and Pepsi. Rovio launched this product last year and then expanded it to several countries including Russia, Australia, New Zealand, Spain and the U.K. Angry Birds, which logged more than 1 billion downloads in 2012, targets to become an industry giant like Disney.

Khaitan’s Radico Khaitan is now the largest local player in the spirits business. But he has to watch his patch as foreign competition looms

Radico Khaitan is on a High

by Prince Mathews Thomas | Jul 24, 2013

Lalit Khaitan (L), chairman, with Abhishek Khaitan, MD of Radico Khaitan

Abhishek Khaitan’s Radico Khaitan is now the largest local player in the spirits business. But he has to watch his patch as foreign competition looms

In business, it helps to keep your ears to the ground. For Abhishek Khaitan, that meant doing the rounds of pubs. He had his first ‘eureka’ moment while pub-hopping in Bangalore. Even as he was studying for an engineering degree in the garden city, the family’s distilling and bottling business was at the back of his mind.
His discovery: “Indian drinkers were becoming more conscious of what they were consuming. Brands had become very important.” This insight led Abhishek and his father Lalit Khaitan, chairman of Radico Khaitan, to launch the company’s first whisky brand—8PM—some years later. It went on to sell a record one million cases in its very first year—a historic first in the Indian spirits industry. Read more of this post

Banyan Tree’s Ho Kwon Ping: “Asia is going to be a primary engine of growth, but that growth can come to a sputtering stop if our business models are not sustainable”

Experts call for Asia-based models

Achara Deboonme,
Annika Bhasavanich
The Nation July 24, 2013 1:00 am

Fresh approach needed for sustainability, added strength in view of long-lasting global uncertainties

Asian companies need to invent their own business models for long-term sustainability, models that address social and environmental costs, highlight brand building, and capitalise on the diversity of Asian culture, said panellists at an international conference. 
New models are a must as Asia has to strengthen its resilience to global uncertainties, which are not likely to end soon as long as most global trade is denominated in US dollars, agreed participants in a panel discussion on “Asia: Sustainable Business Models” at The Nation International Conference last Friday (July 19, 2013).
“Asia is going to be a primary engine of growth, but that growth can come to a sputtering stop if our business models are not sustainable,” said Ho Kwon Ping, executive chairman of Banyan Tree Holdings.  Read more of this post

Bribery serves as life-support for Chinese hospitals

Bribery serves as life-support for Chinese hospitals

5:14pm EDT

By Kazunori Takada

SHANGHAI (Reuters) – Bribery is the lubricant that helps keep China’s public hospitals running, and the health system would struggle to function without illegal payments to poorly paid doctors and administrators, say medical practitioners and industry experts.

They say government policies are partly to blame for a system in which doctors and other staff expect to be paid extra fees to perform operations and take kickbacks from pharmaceutical firms and medical-equipment suppliers. Read more of this post

Stratfor’s founder George Friedman: The End Of The Chinese Economic Miracle

7/23/2013 @ 8:24AM |1,543 views

The End Of The Chinese Economic Miracle

By George Friedman, Founder and Chairman of Stratfor, a geopolitical intelligence firm

Major shifts underway in the Chinese economy that Stratfor has forecast and discussed for years have now drawn the attention of the mainstream media. Many have asked when China would find itself in an economic crisis, to which we have answered that China has been there for awhile — something not widely recognized outside China, and particularly not in the United States. A crisis can exist before it is recognized. The admission that a crisis exists is a critical moment, because this is when most others start to change their behavior in reaction to the crisis. The question we had been asking was when the Chinese economic crisis would finally become an accepted fact, thus changing the global dynamic. Read more of this post

Commodity warehousing, the interest rate connection

Commodity warehousing, the interest rate connection

Izabella Kaminska

| Jul 23 19:29 | 10 comments | Share

There are three things that must be remembered when it comes to banks, trading houses and warehousing plays.

• One is that banks and trading houses would not have an incentive to store commodities if the forward market did not compensate them for doing so — meaning speculators are as much to blame as anyone for the hoarding problems, because they are basically the ones donating money to ensure stocks of commodities are built up during times of plenty on the assumption that seven years of scarcity will follow, making it all worthwhile.
• Second, there would be no incentive to hold commodities as stock, even during a contango, if regular risk-free financial investments offered a better return. Contango is meaningless unless the yield that can be extracted from the forward markets more than compensates for your financing and warehousing costs. During high interest rate periods, chances are that it pays commodity players much more to sell stock as soon as they produce it, and to reinvest in yield-bearing instruments. During low interest rate periods, when safe returns are lacking elsewhere, the incentive to extract yield from storing commodities and futures rises.
• None of this is necessarily the product of a sinister plot. If there is manipulation, it is the result of collective responses to market dynamics that present exploitable arbitrage opportunities to intelligent agents. It is unwitting manipulation at worst. The question we should be asking is whether banks (who have fiduciary duties, unlike traders) consciously exploit or mislead institutional clients and investors in the process. It is entirely possible, however, that they not only believe in their own scarcity projections, but that they feel they are fulfilling an economic duty in bridging today’s oversupply with tomorrow’s undersupply. Read more of this post

Prices Fuel Outrage in Brazil, Home of the $30 Cheese Pizza

July 22, 2013

Prices Fuel Outrage in Brazil, Home of the $30 Cheese Pizza

By SIMON ROMERO

SÃO PAULO, Brazil — Shoppers here with a notion of what items cost abroad need to brace themselves when buying a Samsung Galaxy S4 phone: the same model that costs $615 in the United States is nearly double that in Brazil. An even bigger shock awaits parents needing a crib: the cheapest one at Tok & Stok costs over $440, more than six times the price of a similarly made item at Ikea in the United States. For Brazilians seething with resentment over wasteful spending by the country’s political elite, the high prices they must pay for just about everything — a large cheese pizza can cost almost $30 — only fuel their ire. Read more of this post

Investor alarm as India flashes amber; RBI’s unexpected steps renew focus on Delhi’s troubled finances

July 23, 2013 3:22 pm

Investor alarm as India flashes amber

By James Crabtree in Mumbai

The rains fall fast during India’s annual monsoon season. Unfortunately for the country’s government, the rupee has fallen just as quickly. The Reserve Bank of India responded last week with a slate of measures to trim liquidity, aiming to stop further tumbles in a currency that has dipped around 10 per cent since May, hitting repeated all-time lows. The moves are also designed to win back badly needed foreign capital, which has flowed out of many emerging markets, including India, in the aftermath of remarks by US Federal Reserve chairman Ben Bernanke last month about scaling back the central bank’s asset-buying programme. Read more of this post

China to Punish Hospital Staff for Kickbacks as Crackdown Widens

China to Punish Hospital Staff for Kickbacks as Crackdown Widens

China will punish 39 hospital employees for taking illegal kickbacks from drugmakers, reflecting widening efforts to root out medical corruption that includes an investigation of GlaxoSmithKline Plc. (GSK)

The hospital staff received inducements totaling 2.82 million yuan ($460,000) from two pharmaceutical companies between January 2010 and December 2012, China’s official Xinhua news agency reported yesterday, citing the National Health and Family Planning Commission. Read more of this post

In Paris, Chinese Shopping-Tour Buses Go Out of Fashion; Retailers Rethink Strategies as Fewer High-Spending Visitors Arrive en Masse

July 23, 2013, 5:01 p.m. ET

In Paris, Chinese Shopping-Tour Buses Go Out of Fashion

Retailers Rethink Strategies as Fewer High-Spending Visitors Arrive en Masse

NADYA MASIDLOVER in Paris and LAURIE BURKITT in Beijing

For her recent vacation in Switzerland, Wu Mengbei shunned the whirlwind bus tour of luxury stores many Chinese tourists take in Europe.

The Shanghai resident booked her trip independently and chose to spend more on other activities, such as sightseeing and dining. “On my first couple of trips to Europe I did a lot of shopping, but it’s not so much a priority now,” says Ms. Wu, a bank marketing manager in her thirties. Read more of this post

China’s NDRC Probes Old Veteran Jewellery Stores in Shanghai; Lao Fengxiang may have to uncouple some 250 million- 2.5 billion yuan from its profits for fines

China’s NDRC Probes Old Veteran Jewellery Stores in Shanghai

07-23 16:19 Caijing

Lao Fengxiang may have to uncouple some 250 million- 2.5 billion yuan from its profits for fines.

Following a sweep on baby formula makers and parametrical giants, the powerful National Development and Reform Commission accused gold jewellery association, Lao Fengxiang (600612.SH) and other famous jeweler stores in Shanghai of fixing prices in the latest antitrust probe. The companies under investigation could face a large sum of fine, if proves to be true, analysts say, at risk of eroding profits that have accumulated in years. Companies fixing prices in the market can be delivered a penalty equivalent to 1 percent of one year sales at the least, and 10 percent of one year sales at the most, under Chinese laws. Read more of this post

Presenting The World’s Tallest Skyscraper, Whose Construction Was Just Halted

Presenting The World’s Tallest Skyscraper, Whose Construction Was Just Halted

Tyler Durden on 07/23/2013 13:55 -0400

It appears reality is hitting home in the property bubble capital of the world. The so-called “Skyscraper Index” continues to show an unhealthy correlation between construction of the world’s tallest building and an impending financial crisis – for example, New York 1930; Chicago 1974; Kuala Lumpur 1997, and Dubai 2010. As The Dubai Chronicle reports, the record-breaking Sky Tower in Changsha, China, has seen its budget surge from $625 million to $855 million and completion dates pushed back to April 2014, after originally being scheduled for completion at the start of 2013. and here’s the dreamy video of what it will look like and how fast they were planning on building it… As Barclays notes, often the world’s tallest buildings are simply the edifice of a broader skyscraper building boom, reflecting a widespread misallocation of capital and in impending economic correction. Investors should therefore pay particular attention to China – today’s biggest bubble builder with 53% of all the world’s skycrapers under construction – and India – which with just two completed skyscrapers, now has 14 skyscrapers under construction.

Singapore’s foray into the $300 billion-a-year space industry may seem like a lucrative venture, but the path is lined with risks, especially in satellite manufacturing where Western firms have long dominated and entry barriers are high

Singapore plots economic lift-off with satellites, spacecraft

10:11pm EDT

By Kevin Lim

SINGAPORE (Reuters) – Singapore’s foray into the $300 billion-a-year space industry may seem like a lucrative venture, but the path is lined with risks, especially in satellite manufacturing where Western firms have long dominated and entry barriers are high.

The push into space technology, announced earlier this year, will initially focus on satellites to meet growing demand for top-speed Internet connections as well as high-resolution images commonly used in surveillance, forestry and energy exploration. Read more of this post