China Reforms Face Headwinds at Home and Abroad

China Reforms Face Headwinds at Home and Abroad

In the late 1980s, University of Chicago professor Robert Aliber proposed, partly in jest, what he called the Andy Warhol theory of economic growth: “In the future every country will grow rapidly for 15 years.” He had in mind the plethora of so-called miracle economies that seemed to take off one after the other in the postwar era. In every case, decades of high growth, almost always driven by very high levels of investment, eventually faltered. Read more of this post

Bribery claims infect drug companies’ dealings in China

September 23, 2013 4:00 pm

Bribery claims infect drug companies’ dealings in China

By Andrew Jack and Patti Waldmeir

It began as a rumour on a Chinese social media site in July, but the impact has swiftly spread around the world: allegations that GlaxoSmithKline was the “godfather” of a system of bribery in the country totalling up to $500m. The corruption claims, which have since expanded to other multinational pharmaceutical companies including Sanofi, Novartis and Eli Lilly, have created a growing sense of concern among executives, investors and doctors alike. Read more of this post

How Indonesia Lost Its Growth Mojo; Manufacturing’s share of the economy fell as Jakarta pushed for wage increases, let corruption grow and stifled competition

September 23, 2013, 12:20 p.m. ET

How Indonesia Lost Its Growth Mojo

Manufacturing’s share of the economy fell as Jakarta pushed for wage increases, let corruption grow and stifled competition.

ADAM SCHWARZ

The U.S. Federal Reserve’s decision last week to hold off on the much-awaited “taper” has elicited huge sighs of relief in Indonesia. Already the battered currency and equity markets have gained back a little ground as confidence is rising that the immediate crisis is over. A good deal of credit for Indonesia’s calmed nerves goes to Finance Minister Chatib Basri, who has quietly but effectively assembled a set of reforms that address key investor concerns. But many investors, domestic and foreign, say that it is too early to know whether any broader message has sunk in. Read more of this post

Grupo Lala SAB, Mexico’s biggest dairy producer, is seeking to raise at least $700 million as sales of milk, cheese and yogurt grow twice as fast as the country’s economy

Lala Said to Seek at Least $700 Million in Mexican Milk IPO

Grupo Lala SAB, Mexico’s biggest dairy producer, is seeking to raise at least $700 million in an initial public offering this year, two people with direct knowledge of the transaction said, as sales of milk, cheese and yogurt grow twice as fast as the country’s economy. The size and timing of the sale are subject to change based on market conditions, according to the people, who asked not to be identified because the details are confidential. JPMorgan Chase & Co. (JPM), Morgan Stanley (MS) and Banco Bilbao Vizcaya Argentaria SA (BBVA) are managing the sale, according to a preliminary prospectus filed today with the Mexican stock exchange. Read more of this post

Reebok Turns to ‘Race From Hell’ to Revive Former Glory

Reebok Turns to ‘Race From Hell’ to Revive Former Glory

(Corrects story that ran Sept. 19 to clarify in third and fifth paragraphs that sponsorship is of CrossFit Games and since 2011)

When he reached his late 20s, Ryan Meade watched his friends get “kind of fat” as they married and settled down. To fight the pudge, he took up obstacle racing — endurance contests where he slogs through deep mud, scales walls and slithers under barbed wire. “The races on the weekend are a reason to go to the gym and wake up at 5 a.m. and get a workout,” said the 30-year-old financial executive from West Chester, Pennsylvania. When he wades through the muck at this weekend’s Spartan Race world championships in Vermont, Meade will be wearing $30 Reebok calf support sleeves, good news for a brand that’s seeking to remake itself as a leader in group fitness. The growing industry encompasses everything from the Spartan Race to CrossFit Games to Les Mills Body Attack classes — all of which Reebok now sponsors. Read more of this post

Japan’s Lixil Considers Buying Germany’s Grohe; Deal Would Be Largest Japanese Acquisition of a German Company

Updated September 23, 2013, 11:36 a.m. ET

Japan’s Lixil Considers Buying Germany’s Grohe

Deal Would Be Largest Japanese Acquisition of a German Company

EYK HENNING

Japanese housing-equipment maker Lixil Group Corp. 5938.TO -5.04% is in advanced talks to buy Germany’s Grohe, several people familiar with the deal said, a transaction that could value the bathroom-fittings maker slightly above €3 billion ($4 billion). Grohe’s owners, financial investors TPG and Credit Suisse‘s CSGN.VX -1.14%private-equity arm, are seeking to sell the company, but have been conducting a dual-track process in which they simultaneously prepare an initial public offering of stock in case a sale falls through. The two investors have jointly owned the Düsseldorf-based maker of faucets and showers for almost a decade. Read more of this post

Baseball reflects Japan’s changing economy; The country is realising outside competition is essential to progress

September 23, 2013 7:32 pm

Baseball reflects Japan’s changing economy

By Kurt Campbell

The country is realising outside competition is essential to progress, writes Kurt Campbell

Baseball, America and Japan’s shared national pastime, is a useful window through which to view the two countries’ contrasting and changing attitudes to foreigners in general – and in the economy in particular. Fans in the US have long embraced Japanese stars such as Ichiro Suzuki, the hit machine long with the Seattle Mariners; Hideki Matsui, the slugger beloved by the New York Yankees (and nicknamed Godzilla by fans); and Daisuke Matsuzaka, formerly of the Boston Red Sox, the thrower of the mythical gyroball pitch. Read more of this post

New Zealand’s Privatization Effort Propels IPO Market

Sep 23, 2013

New Zealand’s Privatization Effort Propels IPO Market

LUCY CRAYMER

New Zealand has a reputation for punching above its weight in everything from dairy exports to the America’s Cup. Now it is doing that in the financial arena. Despite being home to only 4.5 million people, the South Pacific nation this year ranks among major global markets for initial public offerings, thanks to a government privatization drive that has put the stock exchange on pace for one of its best-ever years for IPOs by value. So far this year, NZX Ltd.NZX.NZ -0.78% has hosted a total of US$2.3 billion of IPOs, nearly double the $1.3 billion raised over the previous six years combined, according to data provider Dealogic. That has catapulted it into sixth place among the Asian-Pacific region’s top IPO markets—behind Japan, Hong Kong, Singapore, Australia and Thailand—and puts it in 14th place world-wide. Read more of this post

Vietnam Stocks Emerge From Slump; “Investors are a fickle bunch. If there is not sustained progress in reforms, they’ll quickly sour and head onto the dance floor with someone else.”

September 23, 2013, 5:53 p.m. ET

Vietnam Stocks Emerge From Slump

Overhauls Pay Dividends as Peers in Developing Economies Struggle

JAMES HOOKWAY And NGUYEN ANH THU

HANOI—When Vietnam’s decadelong economic boom ended in 2009, Nguyen Huynh Diep lost about $50,000. A novice investor in the country’s stock market, Mr. Diep said he saw the value of many of his holdings slump. Now, though, he is back on the trading floors of Hanoi’s stock brokerages, picking up bargains when he can as Vietnam’s economy begins to heat up again after a long and often painful thaw. “The market’s back up this year,” the 40-year-old Mr. Diep said. “And I keep buying more stock.” Read more of this post

Vietnam’s bad debt attractive to some investors, but regulations still unclear“I don’t know if they physically moved the steel each time but they used the same inventory. Five guys in a row who pledged a bunch of steel that probably doesn’t exist”

Vietnam’s bad debt attractive to some investors, but regulations still unclear

By Associated Press, Published: September 23

HANOI, Vietnam — The soured loans clogging up Vietnam’s banks and the rows of abandoned houses gathering mold in the Hanoi rain are signs of a sick economy. But to foreign investors they represent an opportunity for sparkling returns — if only the Communist government makes them welcome. Neil Hagan, an American debt recovery specialist who wants to start a company servicing bad loans in Vietnam on behalf of foreign buyers, says he gets weekly calls from hedge funds based in Singapore and Hong Kong asking whether now is the time to scoop up some of the debt. So far at least, he advises them to stay put. Read more of this post

Singapore Foreigner Curbs Target Professionals: Southeast Asia

Singapore Foreigner Curbs Target Professionals: Southeast Asia

Singapore will widen foreign-worker curbs to professional jobs as the government clamps down on companies that hire overseas talent at the expense of citizens, stepping up efforts to counter a backlash against immigration. The Southeast Asian nation said yesterday it will set up a job bank where companies are required to advertise positions to Singaporeans before applying for so-called employment passes for foreign professionals. The unprecedented policy will target jobs that pay at least S$3,000 ($2,400) a month. Read more of this post

Maybe New Zealand Can Solve Housing Bubbles

Maybe New Zealand Can Solve Housing Bubbles

As the world’s biggest economies search for ways to let the air out of giant asset bubbles, they might find some answers in tiny New Zealand. (NZOCR)

Fittingly, the nation that begins the developed world’s day and the central bank that pioneered inflation targeting will probably be the first to raise short-term interest rates. The move could come next year as growth steadily returns to levels seen before the collapse of Lehman Brothers Holdings Inc. in 2008. But something far more interesting is afoot at the Reserve Bank of New Zealand’s headquarters in Wellington. Faced with a scary housing bubble not terribly unlike that in the U.S. five years back, Governor Graeme Wheeler should be tapping the brakes now, and hard, or so holds classical monetary theory. Doing so, however, would jeopardize the nation’s 2.5 percent growth amid general global uncertainty. Instead, Wheeler is conducting an experiment: limits on leveraged lending. Read more of this post

US housing: Content to rent? Americans are increasingly abandoning property ownership as investment increases in the rental sector

September 23, 2013 7:17 pm

US housing: Content to rent?

By Anjli Raval

Americans are increasingly abandoning property ownership as investment increases in the rental sector

Sandie Crisman sees the headlines hailing the US housing rebound and wonders when she will get her share of it. The 60-year-old Florida resident is one of the tens of thousands of Americans burnt by the housing bust that wiped out $7tn in homeowner equity and is still suffering from its fallout. “If I could do it all over again, I wouldn’t be a homeowner,” she says. “What’s the point if you can’t guarantee your house will be worth what you paid for it in five or 10 years time?” Read more of this post

US convertible bond sales slow sharply

September 23, 2013 9:47 am

US convertible bond sales slow sharply

By Arash Massoudi in New York

The pace of convertible bond issuance in the US unexpectedly slowed through the summer, defying investor expectations that a rapid number of new deals would come to market as interest rates moved higher. Convertible bonds allow companies to issue debt at ultra-low yields but give investors the option to convert the securities into stock if the share price reaches a preset premium during the bond’s tenure. Read more of this post

The Landesbanken: Inside Germany’s trillion euro banking blind spot

The Landesbanken: Inside Germany’s trillion euro banking blind spot

Tue, Sep 17 2013

By Laura Noonan

HAMBURG (Reuters) – Many Germans feel that whoever wins Sunday’s election, they should not fund any more bailouts of fellow European countries, whose errant banks are a particular bugbear for Berlin. But a cornerstone of Germany’s own banking system, which has already received state bailouts, is facing fresh challenges, increasing the need for reforms which will be very hard for any new government to deliver. Read more of this post

Should the U.S. Finance Alternative-Energy Startups? After some well-publicized failures, two experts debate whether the federal government should play this role

September 22, 2013, 5:17 p.m. ET

Should the U.S. Finance Alternative-Energy Startups?

After some well-publicized failures, two experts debate whether the federal government should play this role.

The federal government has long been a player in the energy industry. On top of its regulatory role, the U.S. government extends tax credits to companies in fossil fuels, renewables and nuclear energy alike. It also makes direct investments. The Tennessee Valley Authority, for instance, a supplier of power to seven states, was created by Congress and has been owned by the U.S. since 1933. Read more of this post

Phoenix Solar to build largest PV solar system in Singapore for supermarket giant Sheng Siong Group,

Sheng Siong’s distribution centre to house largest single solar panel installation

Monday, September 23, 2013 – 16:16

Grace Chua

The Straits Times

SINGAPORE – The 11,000 square metre installation will supply up to 1.2 megawatts when running at peak, and will be built by major solar energy firm Phoenix Solar. The system is expected to start producing electricity by the end of this year, and supply at least 15 per cent of the centre’s consumption. 

Phoenix Solar to build largest PV system in Singapore

The Singapore-based firm will design and build Singapore’s largest photovoltaic system for supermarket giant Sheng Siong Group, which will reduce 730 tonnes of carbon dioxide emissions per year

Phoenix Solar on Monday announced that it will design and build the biggest photovoltaic (PV) system in Singapore for supermarket giant Sheng Siong Group. Read more of this post