HSBC and StanChart hit by Asia focus as economies lose momentum

August 18, 2013 2:49 pm

HSBC and StanChart hit by Asia focus as economies lose momentum

By Sharlene Goff, Retail Banking Correspondent

Ever since the financial crisis, HSBC and Standard Chartered have trumpeted their exposure to faster-growing economies as a welcome differential among the UK banks.

But the recent slowdown in parts of their Asian heartlands – both reported weaker growth in markets including China, Indonesia, Malaysia and Taiwan in the first half of this year – means their reliance on the region is fast becoming a concern rather than a comfort for investors. Read more of this post

Climbing trees to catch fish: A curious to-and-fro about China’s constitution bodes ill for political reform

Climbing trees to catch fish: A curious to-and-fro about China’s constitution bodes ill for political reform

Aug 17th 2013 |From the print edition

FOR well over a century, Chinese scholars have been arguing about national constitutions. In the final years of the Qing emperors, some thought that turning the last imperial dynasty into a constitutional monarchy might forestall its collapse. Conservatives long resisted. But in 1906 a “constitutional reform commission” did report to the Empress Dowager, Cixi. “The real reason”, it concluded, “why other countries have become wealthy and powerful lies in the fact that they have a constitution and decide [important issues] through public discussion.” The dynasty collapsed in 1911. But these days the Communist Party seems to think those Qing reformers were wrong: China does not need a constitution at all, or at least not one that has to be enforced. Read more of this post

Everbright Trading Error Adds to China Broker’s Woes

Everbright Trading Error Adds to China Broker’s Woes

Everbright Securities Co. (601788), the Chinese state-controlled brokerage besieged by falling profits and a regulatory probe, faces a further blow to its reputation after a trading error sparked the wildest swings in the nation’s stocks in four years.

The China Securities Regulatory Commission has started an official investigation into Everbright, the watchdog said in a statement yesterday. The regulator has banned the brokerage from conducting proprietary trading from Aug. 29 to Nov. 18, according to a company statement. Everbright is barred from creating new stock-index futures positions starting today, according to a statement by China Financial Futures Exchange. Read more of this post

Is Hukou Reform the Key to Reviving China’s Economy?

August 19, 2013, 7:44 AM

Is Hukou Reform the Key to Reviving China’s Economy?

As China’s growth slows toward a 20-year low, leaders are searching for a way to revive the economy’s flagging fortunes. The suggestion from some of China’s top policy wonks: reform the hukou system. That was the message that came through loud and clear from a meeting of top academics and policy advisers at a conference hosted by the government’s Chinese Academy of Social Sciences on Friday.

Read more of this post

Most Chinese youths pin hopes on parents for success; It seems that only people with strong backgrounds and connections can “get the last laugh” in such a “snobbish” society

Most youths pin hopes on parents for success: survey

(ecns.cn)    08:22, August 19, 2013

A recent survey shows that most respondents think their peers yearn for effortless success with the help of a strong family background.
The Social Survey Center of China Youth Daily surveyed 3,809 people through minyi.net.cn and sohu.com. Of those surveyed, 80.4 percent believe young people who achieve career success in China are all winners in the “competition of family background,” and 83.5 percent believe their peers hope to join the “competition of family background”.
One respondent said: “Life is a game. Following rules is the only way you can survive”. Young people from ordinary families complain that they are currently being judged on their family backgrounds rather than their abilities and knowledge when they look for jobs. This is probably another one of society’s rules, and it’s called “competition of family background”. Read more of this post

Overcoming the great wall of name squatting in China: How do well-known foreign brands react when unscrupulous profiteers swipe their Chinese names?

Published on 2013-08-10 17:16:39

MONIKER MAYHEM: OVERCOMING THE GREAT WALL OF NAME SQUATTING IN CHINA

How do well-known foreign brands react when unscrupulous profiteers swipe their Chinese names?

ECONOMIC OBSERVER/Worldcrunch

BEIJING — Bottega Veneta, the Italian luxury brand best known for its leather goods, recently renamed itself Bao-Die-Jia in Chinese. But because the Italian apparel has been commonly known by another Chinese homonym, Bao-Ti-Jia, the renaming caused some public outcry, not to mention enthusiastic debate on the Internet. Bottega Veneta has refused to comment, except to say that it has never had an official Chinese moniker before.  But it is widely assumed that the Italian fashion house felt obliged to rename itself in Chinese simply because other Chinese businessmen had preemptively registered the name that was well known to the public. In fact, many other successful foreign brands in China have experienced the same sort of so-called “name squatting”. The only difference is that instead of recognizing the setback discreetly, they often resort to legal recourse. Hermès was probably the first apparel company to encounter this dilemma. As early as 1977, the brand registered its English name and trademark in China — but not its Chinese one. Read more of this post

Property Mogul Wang Jianlin of Dalian Wanda-AMC Emerges as China’s Richest Person

Property Mogul Emerges as China’s Richest Person

Wang Jianlin, owner of China’s biggest commercial land developer, is the nation’s wealthiest person, based on regulatory filings that show his non-real estate businesses are more valuable than previously calculated.

The chairman of closely held conglomerate Dalian Wanda Group, which became the world’s largest movie theater chain after acquiring AMC Entertainment Holdings Inc. last year for $2.6 billion, has a net worth of $14.2 billion, according to the Bloomberg Billionaires Index. He is $3.2 billion richer than Zong Qinghou, founder of Hangzhou Wahaha Group, China’s No. 3 beverage maker. Zong is the country’s second-wealthiest person. Read more of this post

Protect Yourself When Outsourcing to China

August 18, 2013, 4:49 p.m. ET

Protect Yourself When Outsourcing to China

SAABIRA CHAUDHURI

Q: If you’re going to source your product or parts from China, what special safeguards should you take?

A: Start the process of finding the right manufacturer using a site likeGlobalsources.com, which aims to help buyers connect with China-based suppliers, suggests Mike Bellamy, an author and owner of PassageMaker Sourcing Solutions.

When you find factories that might meet your needs, ask for references and find out if the manufacturers have a history of respecting intellectual property and doing solid work. But don’t offer those factories complete specifications or samples of the product you want created, advises Mr. Bellamy, since your idea might get filched. Instead, send or show them a similar product for comparison or some rough sketches. And ask for samples before you commit to an order. Read more of this post

China banks take a hit, world watching whether it can pull through financial reforms

Updated: Monday August 19, 2013 MYT 9:20:19 AM

China banks take a hit, world watching whether it can pull through financial reforms

CHINESE banks’ profits are expected to fall in the first half against a negative outlook for the next three years. The nine Hong Kong-listed mainland banks are expected to report about 10% growth in net earnings when they start releasing results this month, according to analysts. Meanwhile, the non-performing loans ratio is expected to rise by 0.93%. Some analysts see an increase in bad loans and interest rate liberalisation as denting mainland banks’ profits, says the South China Morning Post (SCMP). Regulators have asked lenders not to extend new loans to sectors hit by overcapacity, such as steel and cement. “That means companies will struggle in the case of a prolonged economic slowdown and have problems repaying existing loans,” says SCMP. Read more of this post

What’s Ailing America’s Cattle? Scientists Suspect Livestock-Feed Additives Are Behind Distress

August 18, 2013, 7:34 p.m. ET

What’s Ailing America’s Cattle?

Scientists Suspect Livestock-Feed Additives Are Behind Distress

JESSE NEWMAN and KELSEY GEE

A growing number of cattle arriving for slaughter at U.S. meatpacking plants have recently shown unusual signs of distress. Some walked stiffly, while others had trouble moving or simply laid down, their tongues hanging from their mouths. A few even sat down in strange positions, looking more like dogs than cows.

“I’ve seen cattle walking down a truck ramp tippy-toed,” said Temple Grandin, a doctor of animal science and consultant to the livestock industry. “Normally, they just run down the truck ramp and jump out. We do not want to see bad become normal.” Read more of this post

Shale Grab in U.S. Stalls as Falling Values Repel Buyers

Shale Grab in U.S. Stalls as Falling Values Repel Buyers

Oil companies are hitting the brakes on a U.S. shale land grab that produced an abundance of cheap natural gas — and troubles for the industry.

The spending slowdown by international companies including BHP Billiton Ltd. (BHP) and Royal Dutch Shell Plc (RDSA) comes amid a series of write-downs of oil and gas shale assets, caused by plunging prices and disappointing wells. The companies are turning instead to developing current projects, unable to justify buying more property while fields bought during the 2009-2012 flurry remain below their purchase price, according to analysts. Read more of this post

India can’t be a Jugaad Economy Forever

India can’t be a Jugaad Economy Forever

by Dinesh Narayanan | Aug 19, 2013

India has to implement key reforms in at least three areas—energy, land and labour—to get its economy back on track. It also needs to expand the ambit of economic and political freedom

World Bank data suggest that India was ninth in the world in terms of new businesses registered in 2011. The cost of starting up a business is still high but it has steadily fallen from 70.1 percent of per capita gross national income in 2008 to 49.8 percent in 2012. The time taken to start a business in India has fallen from 33 days four years ago to 27 days in 2012. Newly released Planning Commission numbers show that India reduced extreme poverty by 15.3 percent  in seven years; that is, 138 million people were lifted out of absolute misery between 2004-05 and 2011-12. In the same period, millions of Indians moved up the social ladder to be counted as middle class. Sales of luxury cars, designer clothes and high-tech gadgets have been growing at 15-20 percent. A Bain & Company report on luxury has been quoted as estimating the number of people with disposable incomes of over $100,000 to top 132,000 in 2013, up 60 percent since 2006. Read more of this post

Chaebol criticized for handing shares to minors in advance to pay less gift tax

2013-08-19 10:54

Chaebol criticized for handing shares to minors

The number of stock-rich South Korean minors jumped 10 percent this month from a year earlier, data showed Monday, as more rich people handed over wealth to their offspring in advance to pay less gift tax. According to the data by local research firm Chaebul.com, the number of minors with shares worth more than 100 million won ($89,887) came to 268 as of Friday, compared to 243 tallied a year earlier. The number of South Korean minors with shares worth more than 1 billion won also jumped 31.3 percent over the cited period to reach 105, the data also said. Of the minors tallied, seven of them had shares worth more than 10 billion won. The richest in terms of value of shares held was the GS Group’s Executive Vice President Huh Yong-su’s eldest son, whose shares were worth 44.5 billion won, trailed by his second son at 18 billion won. The eldest son of Chung Mong-jin, who heads chemicals maker KCC Corp., ranked third with 17.2 billion won. The research firm said the on-year increase was brought on by a drop in the local bourse this year that made it cheaper for stockholders to turn over shares to their kids. Lower stock prices translate into lower gift taxes. South Korea’s benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,920.11 Friday, down 1.97 percent from 1,957.91 tallied a year earlier. (Yonhap)

Korea’s leading brokerage houses are reeling from the unprecedented earning shocks many suffered between April and June in the wake of the prolonged market slump

2013-08-18 16:48

Soaring loss hits Hyundai Securities

By Yi Whan-woo
A number of the nation’s leading brokerage houses are reeling from the unprecedented earning shocks many suffered between April and June in the wake of the prolonged market slump. Among them, Hyundai Securities suffered the worst performance, with its operating loss expanding to 25.6 billion won ($23 million) in the first quarter from the previous year’s 11.4 billion won loss. Brokerages close their books in March. Daeshin Securities also had its operating loss more than double to 14.3 billion won during the same period. The worsening performance was due mainly to a toxic mixture of sluggish trading caused by the prolonged market slump and the rise in yields on bonds following U.S. Federal Reserve Chairman Ben Bernanke’s remark on ending the economic stimulus policy. Bernanke said in June that the U.S. economy offers hints of the possibility of beginning to slow the pace of its bond-buying stimulus. KDB Daewoo Securities, the No. 1 market player, posted an operating profit of 3.76 billion won ($3.36 million) in the April-June period, down 86.8 percent from the previous year and worse than the 56 percent forecasted by FnGuide, a financial news provider. Samsung Securities posted an operating profit of 15.4 billion won, a 63 percent year-on-year decrease. Mirae Assets Securities said its operating profit fall by more than six-fold during the same period, down 19.8 billion won in 2011 to 3 billion won this year. In contrast, there are a couple of firms that have managed to weather the market slump. Korea Investment & Securities posted an operating profit of 24.7 billion won in the first quarter, up 10 percent from a year before. Shinhan Investment, the securities arm of Shinhan Financial Group, and Hana Daetoo Securities, also saw their operating profits jump by 298 percent and 606 percent, respectively, to 19.7 billion won and 4 billion won, during the cited period.

The Kaesong Trap: Restarting the industrial zone may restrict Seoul’s ability to respond to the North’s provocations

August 18, 2013, 1:03 p.m. ET

The Kaesong Trap

Restarting the industrial zone may restrict Seoul’s ability to respond to the North’s provocations.

BRUCE KLINGNER

South and North Korean negotiators reached a preliminary agreement last week to reopen the jointly run industrial zone in Kaesong. But their success against considerable odds raises several questions.

Most fundamentally, why does Seoul want to return to Kaesong in the first place? The benefits lop-sidedly accrue to Pyongyang, providing a steady source of hard currency to the beleaguered regime. On the southern side, there is no economic incentive, corporate advocacy or political interest in expanding the complex. Even before the most recent round of North Korean threats, Kaesong was on life-support. Read more of this post

Thai Growth Slows as Scope for Monetary Stimulus Seen Limited

Thai Growth Slows as Scope for Monetary Stimulus Seen Limited

Thai economic growth slowed for a second quarter as exports cooled and local demand weakened, with rising household debt restricting the scope for monetary easing.

Gross domestic product increased 2.8 percent in the three months through June from a year earlier, after expanding a revised 5.4 percent in the previous quarter, the National Economic and Social Development Board said in Bangkok today. The median of 16 estimates in a Bloomberg survey was 3.3 percent.

Southeast Asian nations from Singapore to Indonesia have seen exports falter as growth slows in China, and Europe and Japan struggle to sustain economic recoveries. The Bank of Thailand will hold the policy interest rate at 2.5 percent at its Aug. 21 meeting, a Bloomberg survey showed, after Assistant Governor Paiboon Kittisrikangwan said last month that household debt at 80 percent of GDP limits the scope for further easing. Read more of this post