Indian Billionaires Paying 10% for Cash Shows Muddled RBI

Billionaires Paying 10% for Cash Shows Muddled RBI: India Credit

Just when India’s biggest stimulus package in a decade was close to paying off, a cash crunch engineered by the central bank to shore up the rupee has pushed borrowing costs for leading companies back above 10 percent.

Billionaire Anil Ambani’s Reliance Capital Ltd. sold three-month commercial paper at 10.35 percent this week, compared with the 8.95 percent it paid for one-year funds in June. Three-month CP yields surged 249 basis points this month to a 16-month high of 10.91 percent yesterday, data compiled by Bloomberg show. Similar U.S. rates were at 0.23 percent. Read more of this post

How much is Fed aid to U.S. corporate profits worth?

How much is Fed aid to U.S. corporate profits worth?

1:10am EDT

By Herbert Lash

NEW YORK (Reuters) – Many on Wall Street believe the Federal Reserve’s monetary policy is behind record corporate earnings and the stock market’s surge to all-time highs this year.

But how much is a burning issue for investors who wonder how the economy and stocks will perform once the Fed eventually eases its buying of $85 billion a month in bonds and eventually allows short-term rates to climb. Read more of this post

As Canada’s junior miners flounder, long-term damage looms

As Canada’s junior miners flounder, long-term damage looms

1:07am EDT

By Allison Martell and Euan Rocha

TORONTO (Reuters) – Hundreds of small mineral exploration companies may have their stock delisted by Canada’s TSX Venture Exchange in the coming months, choking off a development pipeline that has long supplied major miners with new projects.

As commodity prices boomed in the last decade, a flood of new issuers swelled the ranks of the Venture, TMX Group Inc’s exchange for small-capitalization companies, burnishing Canada’s reputation as the center of global mining finance. Read more of this post

Hong Kong Appetite for $100 Mangoes Boosts ANA Cargo: Freight

Hong Kong Appetite for $100 Mangoes Boosts ANA Cargo: Freight

ANA Holdings Inc. (9202), Japan’s largest airline, is targeting Hong Kong’s appetite for next-day delivery of $100 mangoes and other food to boost its cargo as shipments of Panasonic Corp. (6752) and Sony Corp. televisions slump.

Hong Kong, the biggest destination for food and live animals exported by air from Japan, is buying more Japanese beef, cherries and other premium items as the number of rich in the city increases. Expanding demand is prompting the airline to add more cargo flights in the region. Read more of this post

Charlie Munger: Energy Independence Is A Dumb Idea

CHARLIE MUNGER: Energy Independence Is A Dumb Idea

ROB WILE JUL. 24, 2013, 11:15 AM 3,820 16

Some surprising people, including the CEO of Exxon, think true American energy independence is actually a bad idea. Add Berkshire Hathaway Vice-Chairman Charlie Munger’s name to that list. Munger recently spoke at the Committee of 100 U.S.-China relations conference (via Farnam Street Blog’s Shane Parrish notes and Tim Harford). The moderator asked Munger a basic question about which sectors Berkshire believes are ripe for growth. He responded by begging off that question and launched instead into a critique of America’s energy policy, especially the continued insistence on independence. But unlike other commentators who’ve refuted the concept, Munger approached the question from a more apocalyptic angle: Read more of this post

Bond Investors Turn to Cash; Investors are cashing out of bonds but remain hesitant to plunge into stocks

July 24, 2013, 8:28 p.m. ET

Bond Investors Turn to Cash

Investors are cashing out of bonds but remain hesitant to plunge into stocks

CHRIS DIETERICH

Investors are cashing out of bonds but remain hesitant to plunge into stocks, preferring instead to buy money-market mutual funds despite their low returns. The surprise move highlights persistent investor anxiety with equities even as stock indexes reach new highs. Investors withdrew an estimated $43 billion from taxable bond mutual funds last month, the largest-ever monthly outflow, according to the Investment Company Institute. The debt-market swoon was fueled by worries that the Federal Reserve was softening its commitment to keeping interest rates low. Rising interest rates mean lower bond prices. Read more of this post

Up to 9,000 Singapore private property owners could be forced to sell their homes if interest rates rise in the city-state

9K units of private property could be forced sold if interest rates rise

July 24th, 2013 |  Author: Contributions

Up to 9,000 Singapore private property owners could be forced to sell their homes if interest rates rise in the city-state, according to an analyst report published today.

On the back of news that up to 10 percent of Singapore households may have already over-leveraged their private property purchases beyond the new 60 percent limit that was recently imposed by the Monetary Authority of Singapore (MAS), wealth management firm Religare Enterprises has cautioned its clients to avoid investing in Singapore property developers. Read more of this post

Stalled Project Shows Why China’s Economy Is Wobbling; The $91 Billion Caofeidian Industrial Zone in Beijing Is Mired in Debt and Unfulfilled Promise

July 24, 2013, 5:41 p.m. ET

Stalled Project Shows Why China’s Economy Is Wobbling

The $91 Billion Caofeidian Industrial Zone Is Mired in Debt and Unfulfilled Promise

By DINNY MCMAHON and BOB DAVIS

Buildings, some incomplete, in China’s Caofeidian industrial park.

CAOFEIDIAN, China—A $91 billion industrial project here, mired in debt and unfulfilled promise, suggests part of the reason why China’s economy is wobbling – and why it will be hard to turn around. The steel mill at the heart of Caofeidian, which is outside the city of Tangshan, about 225 kilometers (140 miles) southeast of Beijing, is losing money. Read more of this post

Is China’s debt nightmare a province called Jiangsu?

Is China’s debt nightmare a province called Jiangsu?

5:16pm EDT

By Koh Gui Qing

WUXI, China (Reuters) – The nightmare scenario for China’s leaders as they try to wean the country off a diet of easy credit and breakneck expansion is a local government buckling under the weight of its own debt. Few provinces fit that bill quite like Jiangsu, home to China’s most indebted local government.

Hefty borrowings through banks, investment trusts and the bond market by Jiangsu’s provincial, city and county governments have saddled the province north of Shanghai with debt far higher than its peers, public records show.

Read more of this post

Inner Mongolia Property Mogul Bites the Dust; The real estate empire Li Guomin built in Bayan Nur has withered in the heat of a corruption scandal

07.24.2013 19:13

Inner Mongolia Property Mogul Bites the Dust

The real estate empire Li Guomin built in Bayan Nur has withered in the heat of a corruption scandal

By staff reporter Wang Heyan

Bayan Nur is a city nestled in the crook of a crescent-shaped valley, between the Yellow River and a desert, and surrounded by productive farms. It’s name is Mongolian for “fertile lake,” owing to the swampy Lake Wuliangsu on the crescent’s eastern edge. Bayan Nur is also an economic hub for north-central Inner Mongolia Autonomous Region that’s prospered in recent years on the back of a local real estate boom. But these days, unlike the fertile crescent’s well-watered farms, Bayan Nur’s real estate industry as well as its economy are gathering dust in the dry heat of a corruption scandal. Read more of this post

Private Retirement Funds Find Malaysia a Tough Sell

July 24, 2013, 9:40 a.m. ET

Private Retirement Funds Find Malaysia a Tough Sell

People Are Slow to Sign Up to Program Meant to Supplement Government Pension Plan

JASON NG

Malaysia’s voluntary private-retirement savings program has gotten off to a slow start since being launched last year, despite lures of tax breaks for contributions and a high overall savings rate in the country. Employees in Malaysia are required by law to contribute to the separate Employees Provident Fund, or EPF, which holds assets valued at more than 536 billion ringgit ($169 billion). Returns on that government-run pension fund have been at least 4.5% annually over the past decade, while one-year fixed deposits in banks earn up to 3.2%. Read more of this post

IMAX to Build Up to 120 New Theaters in China

July 25, 2013

IMAX to Build Up to 120 New Theaters in China

Deal With Dalian Wanda Follows Pact With South Korean Partner

BEIJING—IMAX Corp. IMX.T -0.15% is joining with China’s largest cinema chain to build as many as 120 new theaters in the country, dwarfing a deal that the company announced with a Korean partner last week. The Chinese deal is IMAX’s latest to target Asian consumers’ increasing demand for watching Hollywood blockbusters on bigger, more immersive screens. Under the agreement, IMAX will add between 40 and 120 theaters. At most, it would bring to 381 the number of IMAX theaters open or planned in China, with Wanda Cinema Line Corp. running up to 210 of them. Read more of this post

Corporate investment: A mysterious divergence; Experts are struggling to explain a great puzzle of the US economy

July 24, 2013 7:09 pm

Corporate investment: A mysterious divergence

By Robin Harding

Experts are struggling to explain a great puzzle of the US economy, writes Robin Harding

Robert Grant made a solid career out of Botox and breast implants. With a broad smile, he looks like Hollywood’s version of a US corporate executive, perhaps because he admits to using some of the rejuvenating products he sold. Treatments to tauten an ageing population are the quintessential – and highly profitable – products of the US economy in the 21st century. Mr Grant has flown high at some of the industry’s top companies, such as Allergan and Bausch & Lomb, which have operations, together with their most ardent customers, in California’s Orange County. Read more of this post

Banks should keep out of mines and warehouses; When Goldman Sachs bought the commodity trading house J Aron in 1981, it also took on Lloyd Blankfein, then a salesman of silver coins

July 24, 2013 6:49 pm

Banks should keep out of mines and warehouses

By John Gapper

When Wall Street launches into unlikely enterprises, it is time, once again, to start worrying

When Goldman Sachs bought the commodity trading house J Aron in 1981, it also took on Lloyd Blankfein, then a salesman of silver coins. Thirty-two years later, Mr Blankfein is Goldman’s chairman and chief executive and the bank owns, among other commodity assets, some aluminium warehouses near the ailing city of Detroit.

The process by which some of the biggest US banks came to own not only physical commodities but infrastructure such as oil tankers and pipelines is a fine example of mission creep since they were split up by the Glass-Steagall Act of 1933. One can see how they got there, but it is a peculiar – and not very desirable – outcome. Read more of this post

Monumental ambitions: Efforts are afoot to tackle the poor planning that busts budgets and wastes time on big projects

July 24, 2013 5:26 pm

Monumental ambitions

By Andrew Hill

Thinking ahead: better Olympics planning has cut budget over-runs, although the London games overshot by 100%

Frank Gehry, the architect, does not like project managers, but over his career he has learnt a lot about project management. His acclaimed Walt Disney Concert Hall in Los Angeles, completed in 2003, fell into a mire of lawsuits about cost overruns, settled five years later with none of the parties admitting blame. The Guggenheim Museum in Bilbao, however, came in 18 per cent under budget and, as important, has yielded greater benefits for the Spanish city than forecast. Mr Gehry urges fellow architects to take more control of the execution of their work: “Don’t be the baby, be the parent and better things will happen,” he said in a 2010 lecture in Oxford. Read more of this post