Hong Kong, Seoul Follow Beijing in Raising Cab Fares in Asia

Hong Kong, Seoul Follow Beijing in Raising Cab Fares in Asia

Hong Kong and Seoul followed Beijing in increasing taxi fares for the first time in years after disgruntled cab drivers complained they weren’t getting paid enough to be hailed all day. Starting Dec. 8, the base fare in Hong Kong island will rise for the first time since 2011, increasing by HK$2 ($0.26) to HK$22 for the first 2 kilometers (1.2 miles), the government said on its website yesterday. In Seoul, the base fare will rise by 600 won ($0.56) to 3,000 won, the first increase since 2009, though the starting date will be determined later, the city said in an e-mailed statement. Read more of this post

Banking World’s Ikea Born in Sweden Challenging Deposit Giants

Banking World’s Ikea Born in Sweden Challenging Deposit Giants

Sweden’s state-backed mortgage lender wants to take retail customers from the nation’s biggest banks as it targets as much as $14 billion in deposits. SBAB plans to more than double its share of Sweden’s savings market to as much as 6 percent in the coming years, from today’s 2 percent, Chief Executive Officer Carl-Viggo Oestlund said yesterday in an interview at the bank’s headquarters in Stockholm. Oestlund predicts the bank’s deposit base will rise as high as 90 billion kronor in coming years ($14 billion). Read more of this post

Debt Disaster Seen Unless VAT Rises to 20% by 2020: Japan Credit

Debt Disaster Seen Unless VAT Rises to 20% by 2020: Japan Credit

Japan must raise its sales tax to at least 20 percent by the time the Olympics come to Tokyo in 2020 to avert a “disaster” in its bond market, according to the head of a panel advising the world’s biggest pension fund. The consumption levy, due to increase in April for the first time since 1997, will need to quadruple from current levels to handle Japan’s increasing welfare costs and rein in the nation’s debt, said Takatoshi Ito, who leads an investment panel for the 121 trillion yen ($1.23 trillion) Government Pension Investment Fund. He said funds like GPIF are at risk of being too dependent on Japanese government bonds, where 10-year yields of 0.670 percent are the lowest globally. Read more of this post

Henry Ford’s Century-Old Line Finds $15 Billion in China

Henry Ford’s Century-Old Line Finds $15 Billion in China

On Oct. 7, 1913, Henry Ford’s assembly line moved for the first time. A century later, among the changes in Ford Motor Co. (F)’s production, none is more dramatic than simply where it takes place. Ford vehicles assembled in China and the rest of Asia now outnumber those built in Europe for the first time. By 2015, Ford will have the capacity to produce more cars and trucks in Asia than it made last year in North America. Read more of this post

Fonterra CEO Says Whole Milk Prices Too High, Need to Decline

Fonterra CEO Says Whole Milk Prices Too High, Need to Decline

Fonterra Cooperative Group Ltd. Chief Executive Officer Theo Spierings said milk powder prices are too high and risk hurting the dairy industry unless they normalize. “The distance between whole milk powder and the other milk products is too big,” Spierings said in an interview in Auckland today after Fonterra, the world’s largest dairy exporter, reported a 3 percent drop in earnings for the 2012-13 year. Higher prices not only push customers toward other milk products, they also make substitutes such as soy or vegetable oil more attractive, he said. Read more of this post

Chanos Undeterred by China Growth as O’Neill Bullish

Chanos Undeterred by China Growth as O’Neill Bullish

China’s improving economic fundamentals are unconvincing to Jim Chanos, the founder of Kynikos Associates Ltd., who is maintaining short bets on the nation’s banks. “My caution is related to the credit-driven model,” said Chanos, who correctly bet in 2001 on the collapse of Enron Corp., on a panel moderated by Tom Keene at the Bloomberg Markets 50 Summit in New York. “If you grow new credit by 30 percent to 40 percent” of gross domestic product a year, it’s not difficult to reach the government’s growth target, he said. A Chinese manufacturing index rose to a six-month high in September, boosting Premier Li Keqiang’s odds of meeting the year’s 7.5 percent expansion goal. The economy grew 7.7 percent last year, the slowest since 1999, as loan expansion fueled concern that banks may fail. Read more of this post

China Beige Book Shows Slowdown, Opposite Official Data

China Beige Book Shows Slowdown, Opposite Official Data

China’s economy slowed this quarter as growth in manufacturing and transportation weakened in contrast with official signs of an expansion pickup, a private survey showed. Increases in business-investment and real estate revenue also slowed, while service industries picked up and employees became tougher to find, the survey from New York-based China Beige Book International said yesterday. The report is based on responses from 2,000 people from Aug. 12 to Sept. 4 as well as 32 in-depth interviews conducted later in September. Read more of this post

JIM VS. JIM: The Ultimate China Bull And The Ultimate China Bear Debate The Country’s Future

JIM VS. JIM: The Ultimate China Bull And The Ultimate China Bear Debate The Country’s Future

LINETTE LOPEZ SEP. 24, 2013, 3:07 PM 1,794 3

Jim O’Neill, former head of Goldman Sachs Asset Management, coined the term ‘BRIC’, and is a huge bull on China. Jim Chanos, the CEO of Kynikos Investments and famed short seller, is a massive China bear. They faced off at the Bloomberg Markets 50 conference, Bloomberg TV’s Tom Keene hosted. Here we go. Keene started us off by asking the guys to lay out their arguments. O’Neill said that “most of the reason” why China has slowed is because it has deliberately slowed, and either way the rate they’re going to grow at this year is equivalent to the U.S. growing at 4%. Chanos countered the that Chinese model is all wrong. It’s built on credit. So in a sense, he said, “we’re talking passed each other.” He doesn’t disagree with the number O’Neill presented, but what that number is built on, which is an investment driven model. “If you’re going to grow net new credit in this economy by 30%-40% you ought well to be growing by 7% real,” said Chanos. It’s the health of the system, especially banking, Chanos is concerned about. “And by the way I’m using their data,” he said smiling at O’Neill. This is where things got deep. “It was blatantly obvious to people three years ago that China was finished,” said O’Neil. The takeaway there (from O’Neill) was that Chanos is shorting the old China and he’s bullish on the new one. “But there have been so many new China’s!” said Chanos.  “How do you play the recent bounce in emerging markets,” asked Keene, breaking in. Chanos responded: “I’m looking at Petrobras” (that’s Brazil’s state oil company that Chanos has openly said is subsidizing lower prices for its customers and hurting its own business). Chanos went on to say that any company in iron ore or mining is in trouble over the next year as well. Read more of this post

Property groups investing in China look to local investors

September 24, 2013 3:59 pm

Property groups investing in China look to local investors

By Simon Rabinovitch in Shanghai

When Tishman Speyer, the US property company, raised its first China fund in 2007, the money came from overseas investors eager to get a piece of one of the world’s hottest real estate markets. Six years on, China’s property is still sizzling but foreign investors are much more nervous about its outlook. For Tishman Speyer, which remains upbeat about Chinese property, this shift has led to a change of strategy. Instead of tapping overseas markets, it is raising the cash it needs for Chinese projects within China itself, where investors remain much more positive. Read more of this post

Party Will Pay the Price for China’s Rebalancing

Party Will Pay the Price for China’s Rebalancing

We need to keep the impact of financial repression in mind in understanding the Chinese growth model. It is a fundamental cause of China’s rapid expansion and its extraordinary imbalances. State-owned enterprises, like other large-scale investors, have benefited from artificially low interest rates, and it is quite easy to prove that over the past decade they have been value destroyers on a very significant scale. Read more of this post