Woolworths’ loss-making hardware start-up, Masters, admitted a failure to understand the hardware business

Woolworths ‘failed to understand’ hardware

July 18, 2013 – 4:59PM

Eli Greenblat

The director of Woolworths’ loss-making hardware start-up, Masters, has defended the overly optimistic sales and earnings forecasts set down for its new business, but admitted a failure to understand the hardware business. Addressing analysts in the wake of Woolworths being forced to blow out its projected losses for Masters in its first five years, CEO Melinda Smith said the company failed to grasp the seasonality of hardware and acknowledged she didn’t know a lot about the structure of the business when it began. “We didn’t know a lot about this business when we set the budget for financial 2013,” she said. “We didn’t know a lot about the seasonal curves,” she added. “We didn’t have the right stock in some instances.” Read more of this post

China Won’t Have Large Stimulus This Year, Finance Minister Says

China Won’t Have Large Stimulus This Year, Finance Minister Says

Chinese Finance Minister Lou Jiwei said the nation won’t use “large-scale fiscal stimulus” measures this year, adding to signals that the government will tolerate a slowdown in the economy. China will promote growth and boost employment while fine-tuning policies and keeping the fiscal deficit unchanged, and will also avoid big adjustments to short-term macroeconomic policies, Lou said in July 11 comments in meetings with U.S. officials in Washington. The remarks were posted yesterday on the Finance Ministry’s website. Premier Li Keqiang said this month that the nation should keep restructuring the economy as long as growth and employment stay above unspecified limits, even as a second-quarter slowdown in expansion increased risks that China will miss its 7.5 percent goal for the year. The government responded to the global financial crisis in 2008 with a 4 trillion yuan ($586 billion at the time) stimulus and a wave of bank lending. “From a policy perspective, China won’t roll out large-scale fiscal stimulus policies this year,” said Lou, who became finance minister in March. China “will promote economic growth and job creation and fine-tune policies, while keeping the fiscal deficit size unchanged.” Lou said in a press briefing at the Washington meetings last week that growth as low as 6.5 percent may be tolerable in the future. While the government in March set a 2013 growth goal of 7.5 percent, Lou said he’s confident 7 percent can be achieved this year. The official Xinhua News Agency later amended its English-language report on Lou to say there’s no doubt that China can achieve this year’s growth target of 7.5 percent.

To contact Bloomberg News staff for this story: Scott Lanman in Beijing at slanman@bloomberg.net

China’s Richest Man Considers IPO for Department Store Business

China’s Richest Man Considers IPO for Department Store Business

Zong Qinghou, China’s richest man who is worth an estimated $11.3 billion, is considering an initial public offering of his department store businesses.

There is no specific timeframe for the share sale, Zong said at a press conference in Beijing today. The billionaire controls food and beverage conglomerate Hangzhou Wahaha Group Co., which plans to have 100 malls in China in the next three to five years, according to a statement from the closely held company today. Read more of this post

Chaebol under fire amid South Korean scandals

July 16, 2013 6:28 am

Chaebol under fire amid South Korean scandals

By Song Jung-a in Seoul

The audio file is uncomfortable listening. Uploaded on YouTube, it captured a young salesman at Namyang Dairy Products, one of South Korea’s leading dairy companies, bullying a representative of one of the group’s distributors. At one stage he threatens to kill the distributor unless he buys more of the company’s products. The threat comes after a series of verbal insults are hurled at the buyer, who pleads that he does not have the space to store any more stock. The poisonous exchange, which has rocketed around South Korea’s vibrant social media forums since May, has become a lightning rod for mounting discontent over the dominance of the chaebol – the country’s big family-run conglomerates – which are accused of choking the development of small and medium-sized companies. The recording provided an extreme example of something many people believed had been happening up and down the country – lifting a veil on decades of abuse meted out by the chaebol. Read more of this post

Shattering the myth of the ‘Startup Nation’

Shattering the myth of the ‘Startup Nation’

This lofty title has long served as a cover for the low productivity that plagues the Israeli economy.

By Amir Teig | Jul. 16, 2013 | 2:14 PM

Legend has it that a treasure trove of economic reforms is hidden deep down in the confines of the Finance Ministry’s budget department – dozens of important reforms formulated over the years just waiting for the day when the right politician will come along and pluck them out of the files. The department’s capable economists and senior bureaucrats cover all their bases by running everything through committees and past experts. Usually they identify clearly, and in real time, the numerous problems and challenges threatening the Israeli economy, and even formulate solutions. But this work usually goes no further than the filing cabinet: Barring the sense that there is a terrible crisis or a fire that needs to be put out, no politician will commit to risky long-term reforms. And yet, without them, Israel will always be behind. Read more of this post

Asia After the Money Flood; It’s time to prepare for the end of U.S. quantitative easing

Updated July 16, 2013, 6:59 p.m. ET

Asia After the Money Flood

It’s time to prepare for the end of U.S. quantitative easing.

Investors have awakened to the implications for Asia of a gradual unwinding of easy money policies in the West. Witness last month’s cash exodus and stock-market declines as investors re-evaluate their appetite for risk. Higher yields in America are expected to draw portfolio investment back from emerging markets.

The upshot is that Asian leaders accustomed to reaping the growth rewards of plentiful foreign capital are in for a shock. The investors who remain committed to the region will look for those countries that offer the most attractive mix of risk and return. It’s time to revisit economic reforms that will keep them hooked. Read more of this post

A very clear explanation of China’s economic woes; Are there good examples of boondoggles that have been created through this investment boom?

A very clear explanation of China’s economic woes

By Brad Plumer, Updated: July 16, 2013

One of the biggest economic stories in the world right now is the sharp slowdown in China’s economy. On Monday, the country reported that it had grown just 7.5 percent in the second quarter of 2013, a worrisome drop from previous quarters. To get a clearer sense of why China is in such economic turmoil — and whether it could drag the rest of the world down with it — I called up Patrick Chovanec, a longtime China watcher who is currently chief strategist at Silvercrest Asset Management and was formerly an associate professor at Tsinghua University’s School of Economics and Management in Beijing. A transcript of our talk follows.

Brad Plumer: Let’s assume I know nothing whatsoever about China. How would you explain why the country is suddenly facing all these economic problems and making headlines? It seemed like China was booming. Read more of this post

Unorthodox injections sustain China’s healthcare system

July 16, 2013 4:10 pm

Unorthodox injections sustain China’s healthcare system

By Leslie Hook in Beijing

New protesters arrive every couple of minutes at the unmarked gates of the Ministry of Health in Beijing, coming in the faint hope that the national authorities will be able to help where their local hospitals and clinics have failed. One young mother carries a tattered notebook full of medical records, baby ultrasounds and official letters. She says she is trying to get treatment for her son, now aged eight, who has organ damage after drinking toxic infant formula as a baby. Another young woman unfurls graphic pictures of her injuries after a violent beating by police, and says she is here to protest against a local hospital that refused to treat her.

Read more of this post

For Global Drug Manufacturers, China Becomes a Perilous Market

July 16, 2013

For Global Drug Manufacturers, China Becomes a Perilous Market

By KATIE THOMAS

Multinational drug companies now employ more sales agents in China than they do in the United States, their largest market. Several, including Merck and GlaxoSmithKline, are making huge scientific investments in the country, including building research and development centers. Within the next few years, China is poised to surpass Japan as the world’s second-largest pharmaceutical market. The booming Chinese demand for drugs could not come at a better time for Western manufacturers, whose sales have been slumping because of patent expirations in the United States and stringent price controls in Europe. Read more of this post

Myanmar aims to set up its first stock exchange by 2013; many industry players said they are skeptical on whether a stock exchange can actually be operational so soon.

Myanmar aims to set up its first stock exchange by 2013

By May Wong
POSTED: 16 Jul 2013 11:57 PM
Myanmar government is pushing hard to set up its first stock exchange in order to build up their capital markets.

YANGON: Myanmar hopes to set up its first ever stock exchange before the end of this year. It expects Parliament to pass the Security Exchange Law within this month during the current session. Myanmar wants to model its stock exchange after the Japan and Singapore stock exchanges. It feels that both exchanges bear many similarities and meet the needs as well as objectives of Myanmar. Read more of this post

China Slowdown Endangers Southeast Asia: ADB; Singapore Exports Fall 8.8% in Longest Slump Since Global Crisis

China Slowdown Endangers Southeast Asia: ADB

By Dion Bisara on 9:03 am July 17, 2013.
China’s cooling economy threatens to impact growth in Southeast Asia, including Indonesia, the Asian Development Bank said in its outlook update on Tuesday. The Manila-based lender trimmed the region’s economic growth forecast to 5.2 percent this year and 5.6 percent next year in the update to its Asian Development Outlook publication. Originally, the outlook published in April forecast growth to be 5.4 percent in 2013 and 5.7 percent in 2014. “Southeast Asia’s strong start to the year is being tempered by slower growth in the People’s Republic of China and continued weak demand from advanced economies for exports,” the bank said. Read more of this post