Unrated bond issues double in Europe

August 1, 2013 5:11 pm

Unrated bond issues double in Europe

By Christopher Thompson

The number of European companies without investment ratings tapping capital markets for funding has doubled as investors throw caution to the wind in their hunt for yield.

Bond issuance by unrated companies -–or those without investment ratings which measure credit quality – has totalled about €108bn since the beginning of 2010, driven by yield-hungry investors, low interest rates and a dearth of bank finance, according to research by Fitch. Read more of this post

America’s Engineering Hubs: The Cities With The Greatest Capacity For Innovation

America’s Engineering Hubs: The Cities With The Greatest Capacity For Innovation

By Joel Kotkin

Created 07/31/2013 – 12:01

America has always been a nation of tinkerers. Our Founding Fathers, notes author Alec Foege, [1] were innovators in areas ranging from agriculture (George Washington, Thomas Jefferson) and electricity (Benjamin Franklin) to the swivel chair (Jefferson).

Engineering advances drove America’s quest for industrial supremacy in the 19th century, many of them borrowed (sometimes illegally) from the then very resourceful British Isles. By the early 19th century, the U.S. was producing its own major inventions, including the steamboat and cotton gin. By the end of that century, the U.S. was clearly on the way to industrial preeminence. The growth of engineering schools — MIT, the Case Institute, Stevens Institute of Technology, as well as departments at the great land grant universities — generated a steady supply of engineers. For much of the last 70 years, America, has been the world’s leading center of engineering excellence, dominating markets from steel and cars to energy and aerospace. Read more of this post

Kevyn Orr: How Detroit Can Rise Again; Motown’s ‘benevolent dictator’ talks about his fight with creditors and unions, and what the city’s leaders can learn from Miami and Atlanta about revival

Updated August 2, 2013, 7:12 p.m. ET

Kevyn Orr: How Detroit Can Rise Again

Motown’s ‘benevolent dictator’ talks about his fight with creditors and unions, and what the city’s leaders can learn from Miami and Atlanta about revival.

ALLYSIA FINLEY

What do northwest Washington, D.C., South Beach Miami and upper Manhattan have in common? Less than 50 years ago, the now vibrant communities didn’t look much different from most of Detroit, says emergency manager Kevyn Orr—whom Gov. Rick Snyder tapped in March to revive the broken Motor City. This is what gives him hope that Detroit can stage a comeback. Read more of this post

Building a Speedy Supply Chain for Fast Fashion

August 2, 2013, 5:09 PM ET

Building a Speedy Supply Chain for Fast Fashion

Emily Chasan

Senior Editor

At vintage-style online retailer ModCloth, Chief Financial Officer Jeff Shotts is using customer analytics to speed up the supply chain. Mr. Shotts oversees an analytics team as well as the finance operations at the venture-backed online retailer, which sells retro-style dresses, jewelry and apartment accessories. “Understanding customers and what they’re telling us is a critical area for us,” Mr. Shotts said. “Our analytics team is essentially looking at customer behavior, customer demographic and customer responses. Ideally there’s an early warning if a trend starts to deviate.” Rather than buy hundreds of items months in advance and try to sell them as traditional retailers do, Mr. Shotts says the company is using the information it gets from customers before and after it launches an item to predict supply, adjust inventory and understand what type of products will do well as quickly as possible. “We have a very rapid supply chain,” Mr. Shotts said. “We buy shallow quantities up front, and then, as customers purchase we think about doubling or tripling down on our inventory position for what’s selling well.” Read more of this post

Culture of Mass Strikes Suffocates Bangladesh’s Economy; ‘Hartals’ occurring at a time when Bangladesh is already struggling to rebuild its reputation with apparel companies

August 2, 2013, 9:16 p.m. ET

Culture of Mass Strikes Suffocates Bangladesh’s Economy

‘Hartals’ occurring at a time when Bangladesh is already struggling to rebuild its reputation with apparel companies

PATRICK BARTA and SYED ZAIN AL-MAHMOOD

DHAKA, Bangladesh—Amid the fallout of a deadly garment-factory collapse in April, Bangladesh faces a more immediate economic threat from the massive strikes known as “hartals,” which are bringing the country to its knees with disturbing, and rising, frequency. In one such strike last month, protesters attacked buses, blockaded roads and detonated homemade bombs, while at least five people died in clashes with police. Dhaka businesses saw revenue nosedive as shoppers stayed home. Even mango vendors suffered, as supplies from the countryside dwindled with roadways under threat of violence. Read more of this post

China’s Sinovel Wind Group Sets Rules to Prevent Accounting Errors; One-Time Wind-Energy Champion Has Suffered Series of Setbacks

Updated August 2, 2013, 1:55 p.m. ET

China’s Sinovel Wind Group Sets Rules to Prevent Accounting Errors

One-Time Wind-Energy Champion Has Suffered Series of Setbacks

WAYNE MA

BEIJING—A Chinese company accused by U.S. prosecutors of stealing trade secrets outlined new measures to respond to separate accounting problems, as China’s onetime wind-energy champion struggles to recover from a series of setbacks.

Sinovel Wind Group Ltd. 601558.SH -0.74% said in a filing on Friday that it appointed a longtime official with its financial-planning department to the new post of chief auditor. The company also announced new rules and procedures to prevent future accounting errors, including more frequent inventory checks, on-site interviews and inspections, better training for middle managers and enhanced document verification. Read more of this post

Seeking Capital, Some Companies Turn to ‘Do-It-Yourself I.P.O.’s’

July 31, 2013

Seeking Capital, Some Companies Turn to ‘Do-It-Yourself I.P.O.’s’

By AMY CORTESE

Flying back to California, empty-handed, after one last investor pitch in late 2011, Brahm Ahmadi was ready to call it quits. Despite a track record, a clear market opportunity and a loan pledge, he had not been able to attract a single investor. He called his lawyer and told her, “We hit a wall.”

Mr. Ahmadi , the founder of People’s Grocery, a nonprofit focused on food justice issues, hoped to open a commercial grocery store that would offer fresh produce in West Oakland, Calif., a so-called food desert, meaning its 25,000 residents have few healthy food options. A public-private loan fund, California FreshWorks Fund, had issued a letter of intent to lend Mr. Ahmadi two-thirds of the $3.6 million he needed to open the People’s Community Market. There was just one condition — he would first have to raise the remaining $1.2 million from investors. Mr. Ahmadi spent a year pitching to angels, social investors and private equity firms, but most were looking for double-digit returns and a clear exit strategy. Read more of this post

How US economy grew US$560b overnight; Revamped GDP calculation includes spending on R&D and production of original artistic and literary works

A larger, more innovative US economy

Robin Bew

The US government has just comprehensively revised its GDP data, leading to some fascinating results. By counting spending on R&D and the production of artistic works such as films as productive investment, the new data show an economy that is US$560bn larger than previously estimated. In effect, a country roughly the size of Sweden has been added to GDP. Investment in intellectual property goes hand in hand with innovation, which suggests that the US is even better equipped than previously thought to flourish in the knowledge economy. However, as my team of analysts notes slightly ruefully, the latest data revisions play havoc with economic forecasts. Look for changes in our US growth and fiscal projections in the near future.

August 1st 2013

New data reshape picture of US economy

Economic growth, especially in Western countries, has been difficult to come by in recent years. But the US government has found a new way to look at companies and what they spend, and the result is a larger US economy than had been previously estimated–by some US$560bn. In effect, a country slightly larger than Sweden has been added to the US economy in a single stroke. Read more of this post

SGX says bye to offshore AGMs, show of hands; Beginning Jan 1, 2014, all Singapore Exchange (SGX) primary-listed companies and trusts must hold their general meetings in Singapore

SGX says bye to offshore AGMs, show of hands

Saturday, Aug 03, 2013

Kenneth Lim

The Business Times

SINGAPORE – Singapore Exchange-listed companies will have to hold their general meetings in Singapore soon and conduct poll voting in two years’ time, according to new rules introduced by the market operator on Wednesday. The move tackled two items at the top of many governance wish lists and was welcomed by observers. They wondered, nevertheless: what took them so long? “We have been asking for this for the longest time,” said David Gerald, president of the Securities Investors Association (Singapore) (SIAS). “Well, better late than never.” Beginning Jan 1, 2014, all Singapore Exchange (SGX) primary-listed companies and trusts must hold their general meetings in Singapore. Read more of this post

South Korea’s bold plan to become a global gambling hub is falling apart; The Incheon Free Economic Zone has scrapped a $280 billion plan to develop a gambling center that would rival Macau

August 2, 2013, 4:19 PM

Incheon’s Casino Dreams Fall Apart

By Kwanwoo Jun

South Korea’s bold plan to become a global gambling hub is falling apart. The Incheon Free Economic Zone of South Korea said Thursday it scrapped a $280 billion plan to develop a fishing village off the country’s west coast into a gambling enclave that would rival the Chinese territory of Macau. The plan collapsed because Eightcity–the business consortium that includes the South Korean unit of luxury hotel operator Kempinski AG–failed to attract enough investment, officials at the Incheon economic zone said. Read more of this post

Shale-Boom Profits Bypass Big Oil; Shell, Exxon Came Late to the Party, Then Made Massive Investments

August 1, 2013, 8:14 p.m. ET

Shale-Boom Profits Bypass Big Oil

Shell, Exxon Came Late to the Party, Then Made Massive Investments

DANIEL GILBERT, JUSTIN SCHECK and TOM FOWLER

Billion dollar write downs and falling profits from two of the biggest oil companies could mean a limit to how big oil companies can get. Heard on the Street’s Liam Denning joins MoneyBeat. Photo: AP.

Some of the world’s biggest energy companies are struggling to make money from massive bets on the shale boom in North America, where deposits of oil and gas are proving abundant but not always profitable. Royal Dutch Shell RDSB.LN -0.36% PLC, which has had a tough time coaxing crude oil from dense rock formations, said Thursday its shale holdings in the U.S. are worth $2.2 billion less than it had previously determined. The write-down helped push the Anglo-Dutch oil giant’s second-quarter earnings down 60% from a year earlier. The company said it would explore selling some of its U.S. shale properties. Read more of this post