Burned-out fund managers show reality of City life’s “easy option”

Burned-out fund managers show reality of City life’s “easy option”

8:57am EDT

By Sinead Cruise and Tom Bill

LONDON (Reuters) – When Sanjeev Shah quit his job last month, eyebrows were raised. This wasn’t another burned-out banker: The 43-year-old was a successful fund manager running 2.8 billion pounds ($4.5 billion) for Fidelity Worldwide Investment, reaping big returns. His reasons for leaving – “This is a role that demands 110 percent effort, focus and intensity. I don’t want that level of intensity” – shed rare light on an industry often dismissed as the easy option in the world of finance. “Do we have an easy life? If you went back 25 years ago, that may have been the case but people are working significantly longer hours and are rather more professional about what they do now,” said one senior fund manager, who asked not to be named because of the sensitivity of the subject. Read more of this post

The Nobel Prize Is No Crystal Ball

Oct 18, 2013

The Nobel Prize Is No Crystal Ball


For investors, the main lesson from this week’s announcement of the Nobel Prize in economics should be humility about anyone’s market-forecasting ability—especially your own. This past Monday, the economics prize went to three researchers whose work seems to have little in common: Eugene Fama, a leading advocate of the theory that stock prices are efficient; Lars Peter Hansen, who probes predictive models for statistical weaknesses; and Robert Shiller, who argues that markets are more irrational than efficient. The Nobel committee said these economists’ findings show that “it is quite possible to foresee the broad course of [stock and bond] prices over…the next three to five years.” If only it were that simple.

Read more of this post

As stock splits wane, more may follow Google to $1,000

As stock splits wane, more may follow Google to $1,000

4:17pm EDT

By Julia Edwards


NEW YORK (Reuters) – With its surge on Friday, Google Inc became the latest member, though not likely the last, of a tiny fraternity of companies that boast $1,000 share prices. In a market where stock splits have become rarer, there may be more of this to come than just the two stocks with four-digit stock prices in the Standard & Poor’s 500 index – Google and Priceline.com, which hit $1,000 earlier this year. Historically, once share prices got too high – even around $125 a share – companies split shares to make them more accessible to Main Street investors. But splits have become few and far between, and big numbers are more the norm for familiar names like Apple Inc, Chipotle Mexican Grill Inc, Netflix Inc and Visa Inc. Stock splits peaked in 1986 and 1987, when there were 114 and 111 splits, respectively, and they surged again in the go-go days of the dot-com bubble, with 102 splits in 1997, back when retail investors hungrily chased the tech boom, according to S&P Dow Jones Indices. Read more of this post

How Amazon Could Undercut the iPhone

How Amazon Could Undercut the iPhone

Bloomberg News reports that Amazon.com Inc., the Internet retailer, has been talking with HTC Corp., the mobile-device manufacturer, about the possibility of collaborating on developing a line of smartphones. These would be optimized for Amazon Prime customers to download music and videos, as well as shop at Amazon and Zappos. According to the Financial Times, HTC would make at least three distinct handsets, the first of which may be released as early as next year. This is great news for consumers. For two decades Amazon has ruthlessly undercut its competitors on price without skimping on quality, sacrificing profits to gain market share. (I highly recommend reading the excerpt from Brad Stone’s forthcoming book about Amazon that was recently published in Bloomberg Businessweek for more details about the strategy.) Investors have rewarded this unusual behavior by giving Amazon a market value of $150 billion. Read more of this post

China’s Corruption Drive Shifts Gears

October 18, 2013, 8:05 PM

China’s Corruption Drive Shifts Gears

By Russell Leigh Moses

The detention of Nanjing Mayor Ji Jianye earlier this week might seem like just the latest move in Chinese leader Xi Jinping’s drive clean up the Communist Party ranks by going after both “tigers” and “flies.” In fact, the Nanjing case marks a departure from Beijing’s usual method of coping with corruption by Party members, in a number of important ways. Typically, announcements of an investigation and confinement of a high-ranking cadre that appear in the state-controlled press are terse and uninformative. That’s how the Nanjing media covered the event (in Chinese). Read more of this post

China’s Growth Trajectory Depends on Political Calibrations

China’s Growth Trajectory Depends on Political Calibrations

Xi’s Plans to Shift From Growth-at-Any-Cost Strategy as Big a Factor as Economic Conditions


Oct. 18, 2013 1:01 p.m. ET

China’s growth accelerated, with gross domestic product growing 7.8% in the third quarter from a year earlier. But Louis Kuijs of Royal Bank of Scotland tells Deborah Kan why it will be difficult for the country’s economy to keep up the pace of growth during the fourth quarter.


BEIJING—Chinese President Xi Jinping‘s plans to shift the economy away from a growth-at-any-cost strategy means that China’s GDP rise over the coming year will depend as much on political decisions as on economic conditions at home and abroad. After China said Friday that its third quarter GDP growth accelerated to 7.8%, year over year, from 7.5% in the prior quarter, Chinese officials said the country would have trouble sustaining the faster pace. Read more of this post

Foreign investors are stampeding into South Korea, snapping up stocks in the longest buying spree on record

Foreign Investors Pile Into South Korea

Foreign investors are stampeding into South Korea, snapping up stocks in the longest buying spree on record.


Updated Oct. 18, 2013 7:06 a.m. ET


Foreign investors are stampeding into South Korea, buying up stocks for 36 straight trading days to mark the longest buying spree on record as cheap equities and the nation’sstrong finances attract buyers. Since the start of the second half there’s been $13.1 billion of inflows, more than reversing the $9.4 billion that was yanked out in the first six months of the year. The cash has fuelled a 16% rally in stocks since the end of June to touch this year’s high on Friday, while the currency has also advanced. Much of the allure lies with the country’s solid economy, recording trade surpluses for 19 months that both analysts and investors say bodes well for future economic growth. Unlike previous buying from overseas that has usually centered just on a handful of Korea’s largest companies like Samsung Electronics005930.SE +0.62% and Hyundai Motor,005380.SE -3.02% this time investors are also venturing into smaller and lesser known firms. Read more of this post

Families With Kids Go Homeless as U.S. Rents Exceed Pay: Economy

Families With Kids Go Homeless as U.S. Rents Exceed Pay: Economy

When Montoria Freeland separated from her husband of 15 years in 2008, she left a four-bedroom house and economic security. Before long, her pay and hours as a pharmacy technician were cut and she found herself and her son facing homelessness. Freeland lived with family for a time, she said, and four months ago moved into transitional housing funded by the city government in Washington, D.C., while searching for work that pays more than her $8.25-an-hour retail job. Having lost her oldest son in a 2000 homicide, Freeland said she insists on looking for housing in a safe neighborhood for her surviving one, now 17. She found that’s available only at an increasingly steep price. Read more of this post

Buffett’s Son Calls Junk Bonds Model for Charities

Buffett’s Son Calls Junk Bonds Model for Charities

Howard Buffett, who runs a foundation with money from his billionaire father Warren Buffett, said high-yield debt is an inspiration for the right approach to philanthropy. Promoting economic development in an area of conflict in the Democratic Republic of Congo “is a risky investment, but if that pays off, I would say it’s a little bit like we’re willing to go with junk bonds rather than AAA stocks because the payoff is big.” Howard Buffett, 58, told Bloomberg Television’s Betty Liu in an interview airing today. “We’re betting, we won’t just help people eat better, we will transform their lives.” The Howard G. Buffett Foundation works to improve the lives of the world’s most impoverished people, with a focus on providing access to food and water and ending conflicts. Warren Buffett, who has committed most of his wealth to philanthropy, including initiatives run by his three children, has also encouraged charities to take risks. “We don’t have to worry about making donors happy, we don’t have to worry about fundraising, we don’t have to worry about anything other than can we change something,” Howard Buffett said. “And to do that you absolutely have to be willing to fail. Your greatest lessons will come in failure.” Read more of this post

China warns of slowing demand after the latest trade data showed sales to South-East Asia slowed sharply in September

Updated: Friday October 18, 2013 MYT 8:45:33 AM

China warns of slowing demand

BEIJING: China’s exporters face a difficult time in coming months as demand from emerging markets slows, the Chinese trade ministry warned after the latest trade data showed sales to South-East Asia slowed sharply in September. But China is ready to take measures to support its exporters to ensure the trade sector grows 8% this year as targeted, Commerce Ministry spokesman Shen Danyang said, allowing exporters to see “mild growth” in the next few months. Read more of this post

Lenovo Hesitates on Deals to Avoid Overpaying for Expansion

Lenovo Hesitates on Deals to Avoid Overpaying for Expansion

Lenovo Group Ltd. (992), seen as a suitor for everything from BlackBerry Ltd. (BBRY) to International Business Machines Corp. (IBM)’s server business, said it’s hesitant to make deals because it wants to avoid overpaying. “We will not buy for the sake of buying,” Wong Wai Ming, chief financial officer of the world’s largest personal-computer maker, said in an interview at the company’s Beijing headquarters yesterday. “Even when an opportunity, on the face of it, makes perfect sense for us to do it, it may not happen.” Read more of this post

Shanghai Fudan University develops new Li-Fi technology in which a one watt LED light bulb can help connect four computers to the internet simultaneously

Shanghai Fudan University develops new Li-Fi technology

Staff Reporter


Shanghai’s Fudan University has made a breakthrough with the development of “Li-Fi” technology, in which a one watt LED light bulb can help connect four computers to the internet simultaneously, reports the local Xinmin Evening News. Compared with an average internet connection speed of 150 megabytes per second (Mbps), the new technology — which uses light as a carrier instead of traditional radio frequencies used for Wi-Fi — can also generate speeds as fast as 3.25 gigabytes per second (Gbps), the university said. Read more of this post

Elite French winemakers seek elusive Chinese blend to get China market

Updated: Friday October 18, 2013 MYT 1:19:50 PM

Elite French winemakers seek elusive Chinese blend to get China market

PENGLAI, China: The world’s fine winemakers have exacting standards for soil, climate and cultivation to produce the perfect grape. And they are looking to recreate that unlikely blend in China – better known for cheap mass production. The potential harvest will be more drinkers in the world’s most populous country, where wine consumption more than doubled in the four years to 2011 and is set to rise another 40 percent by 2016, according to the industry’s top trade-fair organiser Vinexpo. Read more of this post

Nissan’s failed ‘Taxi of Tomorrow’

Nissan’s failed ‘Taxi of Tomorrow’

By Alex Taylor III, senior editor-at-large  @FortuneMagazine October 18, 2013: 8:50 AM ET


Nissan’s Taxi of Tomorrow is soon to be yesterday’s news in New York.

Hail a yellow cab in New York City today, and you could be stepping into a dog’s breakfast of vehicles, ranging from a cavernous Toyota (TM) Sienna minivan to a claustrophobic Ford Escape crossover. After climbing into the rear seat, you may find yourself nostalgic for a yellow Crown Victoria, an obsolete sedan that had been in production for 20 years when Ford (FFortune 500) discontinued it in 2011. But chances are you won’t be sliding your fanny into very many Nissan NV200s, the one-time “taxi of tomorrow” that now has only a slim chance of becoming a taxi of today.

The Nissan cab, which was supposed to replace nearly all of the 16 different models currently certified as New York City taxi-worthy, found itself detoured by a combination of technical shortcomings, city hall bumbling, and plain old political hardball. For Nissan, the failure of the NV200 to take over the entire fleet represents a financial loss of $50 million, a missed marketing opportunity, and a very public embarrassment. Read more of this post

Li Ka-Shing Companies to Sell Shanghai’s Lujiazui Financial District Project for $1.16B

Li Ka-Shing Companies to Sell Lujiazui Project for $1.16B

Billionaire Li Ka-shing’s Hutchison Whampoa Ltd. and Cheung Kong Holdings Ltd. (1) will sell a project in Shanghai’s Lujiazui financial district to buyers including China Everbright Ltd. for $1.16 billion. The companies will each sell a 50 percent stake in Extreme Selection, the owner of the company developing the project at Lujiazui Ring Road, Hutchison said in a statement to Hong Kong’s exchange. HYZL Development Co. and HYZL Investment Co. will each buy 47 percent, while Diamond Gate Group Ltd., a China Everbright Ltd. (165) subsidiary, will take the remaining 6 percent, according to an Everbright statement today. Hutchison and Cheung Kong announced in October 2006 that they would spend 1.74 billion yuan ($285 million) to develop real estate in Lujiazui. Some 64 overseas companies had their regional headquarters in the 31.8 square-kilometer district, according to a government website for the area. The Oriental Morning Post reported in August that Cheung Kong planned to sell the Oriental Financial Center office building, the only property with a Lujiazui address listed in the company’s annual report.

To contact the reporter on this story: Eleni Himaras in Hong Kong at ehimaras@bloomberg.net

Hutchison Stops Shopping ParknShop; Li Ka-Shing’s Conglomerate Had Hoped to Reap As Much as $4 Billion for the Supermarket Chain

Hutchison Stops Shopping ParknShop

Li Ka-Shing’s Conglomerate Had Hoped to Reap As Much as $4 Billion for the Supermarket Chain


Oct. 18, 2013 10:29 a.m. ET

HONG KONG— Hutchison Whampoa Ltd. 0013.HK +0.78% , controlled by Asian’s richest man, Li Ka-shing, has decided not to sell its ParknShop supermarket chain, after concluding the private sale at this time wouldn’t deliver maximum value to shareholders. The conglomerate also said Friday that it is considering expanding a strategic review of retail arm A.S. Watson & Co.—which includes ParknShop—to include possible public offerings of all or part of the business, though it wouldn’t relinquish any control. Read more of this post

Morris Chang has reiterated plans to step down as TSMC’s CEO by mid-2014, but remain a “hands-on” chairman

Morris Chang to relinquish role as TSMC CEO by June 2014

Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Thursday 17 October 2013]

Morris Chang has reiterated plans to step down as TSMC’s CEO by mid-2014, but remain a “hands-on” chairman. Chang added that a new CEO or co-CEOs will succeed him by June, without elaborating further. Market watchers generally identify the current TSMC COOs – Mark Liu and CC Wei – as potential CEO candidates. TSMC in March 2012 appointed three co-COOs. The appointment is “to nurture future ‘co-CEOs’,” Chang said previously. Two candidates are left in the CEO race after the retirement of Shang-yi Chiang. Chang’s most-recent remarks about TSMC’s CEO succession plans were made during the company’s investors meeting on October 17. TSMC reported record net profits and revenues for the third quarter of 2013, but warned of weaker sales in the fourth quarter. Nonetheless, TSMC forecast its sales for all of 2013 will register 17-18% growth, and sales for 2014 will log another double-digit increase. In addition, TSMC’s capex for 2014 will stay high at about US$10 billion, according to Chang. TSMC’s 2013 capex is estimated at US$9.7 billion.

Twitter Pre-IPO Patent Paucity Seen Posing Investor Risk: Tech

Twitter Pre-IPO Patent Paucity Seen Posing Investor Risk: Tech

Profits aren’t the only thing lacking at Twitter Inc. ahead of its planned initial public offering. It’s got a dearth of patents, too. The microblogging service said in its prospectus this week that it has nine issued U.S. patents. That compares with 774 cited by Facebook Inc. before its initial public offering in May 2012 and International Business Machine Corp.’s 6,478 patents accrued last year alone. Twitter’s smaller patent trove reflects its philosophy of letting engineers and designers own their inventions. Read more of this post

Transparency becoming major issue for global oil market, says expert, with concerns that prices are subject to manipulation

Updated: Thursday October 17, 2013 MYT 3:38:35 PM

Transparency becoming major issue for global market, says expert

SINGAPORE: Political and public interest in oil markets remains high with concerns that prices are subject to manipulation, delegates at the World Energy Congress were told Thursday.  The concern comes even though recent academic studies suggest that oil prices are driven primarily by the fundamentals of supply and demand. A panel of industry experts at the congress held in Daegu, South Korea on Tuesday noted that shifts in global and regional oil markets, trading of oil futures in emerging financial markets such as Dubai and Shanghai, growing Russian energy exports to Asia and booming US shale oil production could have a significant impact on price discovery. Read more of this post

Europe’s bold vision hits trouble

Europe’s bold vision hits trouble

7:53am EDT

By Luke Baker and Paul Carrel

BRUSSELS/FRANKFURT (Reuters) – Barely a year after European leaders set out an ambitious vision for the euro zone’s future, progress has all but stalled and pressure is building for what may amount to a ‘make or break’ moment for the union. The idea of a roadmap setting out steps towards the deeper integration of the euro zone came about in early 2012, when the debt crisis was at its peak and there were legitimate fears that Greece could be forced out of the currency union, or that the whole European project could disintegrate. Read more of this post

Loans with fewer protections are a warning sign

Last updated: October 18, 2013 5:17 pm

Loans with fewer protections are a warning sign

By Tracy Alloway in New York

The growth of ‘cov-lite’ may point to overheating in credit

The government shutdown temporarily hit markets from stocks to bonds to the $4.5tn “repo market” that underpins the US financial system. But one asset class was curiously immune to the two-week gridlock in Washington – leveraged loans. Read more of this post

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