As Populism Grows in Israel, Big Business Lands in the Crosshairs

As Populism Grows in Israel, Big Business Lands in the Crosshairs

Oct 17, 2013 Israel Middle East & Africa

Over the summer, Israel’s regulatory agencies unveiled a number of new directives on their charges, telling them what to do, and, especially, what not to do. The policies, which target the financial sector and others, have emerged at a time when the population is becoming increasingly restive and critical of the scions of Israel’s big business community. Now, observers are debating who will be the winners and losers in this new environment. Read more of this post

As Developing Economies Grow, Global Value Chains Reach a Turning Point

As Developing Economies Grow, Global Value Chains Reach a Turning Point

Oct 21, 2013 Operations Management Strategic Management Asia-Pacific China Middle East & Africa

In the “flying geese paradigm,” Japanese economist Kaname Akamatsu explains that companies restructure to find the cheapest labor costs by moving low-value activities to nearby less-developed countries. Today that story rings truer than ever before as global value chains (GVCs) reach a critical turning point. Simply put, GVCs take a broader look at supply chains coordinated by multinational companies, but also encompass economic analyses of the countries involved with the activities. Read more of this post

Junk Bonds to Lose 1.5 Percentage-Point QE Cushion, Fridson Says

Junk Bonds to Lose 1.5 Percentage-Point QE Cushion, Fridson Says

Investors in junk bonds will lose a yield cushion of more than 1.5 percentage points as the Federal Reserve winds down its unprecedented quantitative easing program that’s bolstered credit markets for five years, according to Martin Fridson. “Tapering has been delayed, but high-yield investors should nevertheless assume that the end of quantitative easing will eventually hurt their returns,” Fridson, chief executive officer of New York-based FridsonVision LLC, a research firm specializing in speculative-grade debt, wrote in a report yesterday. Read more of this post

Tan Sri Andrew Sheng: Financial system too short term; Some 83% of the financial system’s assets are based on short-term liabilities, financing longer-termed assets; “We are trying to solve a debt overhang, excessive leverage with more debt. Where is the asset?”

Updated: Wednesday October 23, 2013 MYT 11:51:26 AM

Sheng: Financial system too short term

KUALA LUMPUR: One of the issues that needed to be fixed in the financial system was that it was being “too short-termed”, according to Fung Global Institute Hong Kong president Tan Sri Andrew Sheng. Some 83% of the financial system’s assets are based on short-term liabilities, financing longer-termed assets, he added. “We are trying to solve a debt overhang, excessive leverage with more debt. Where is the asset?” “The answer is that this has been a wonderful opportunity for an asset shift. It’s a structural and systemic issue that we need to think about,” he said during the afternoon session at the World Capital Markets Symposium held yesterday. Meanwhile, Sheng said that the global financial crisis that happened in the United States five years ago was not because of the failure to regulate markets but rather a failure of enforcement. “You realise that regulation does not solve all problems. It is not going to be easy moving forward as the rules require us to have more and more rules and frankly speaking I have personally lost the plot,” he said. He noted that the job of a regulator today was becoming “extremely complex” in the global financial system and that there was a need to understand it further.

China money rates shoot up as tightening worries rise

China money rates shoot up as tightening worries rise

1:52am EDT

* 7-day repo contract rise more than 1 percentage point

* Beijing is concerned with inflation, property prices

* Intervention to hold back yuan adding liquidity

* Traders will watch c.bank ops on Thurs for more signals

By Pete Sweeney

SHANGHAI, Oct 23 (Reuters) – China’s primary short-term money rates rose on Wednesday in a delayed reaction to signals from regulators they are considering tightening liquidity to tamp rising inflationary pressure. A policy adviser to the People’s Bank of China (PBOC) told Reuters on Tuesday that the authority may tighten cash conditions in the financial system to address inflation risks. Read more of this post

Panic grips Union govt as onion price hits Rs 100 a kg

Panic grips Union govt as onion price hits Rs 100 a kg

Dipak Kumar Dash & Tushar Pawar, TNN | Oct 23, 2013, 04.50 AM IST

NEW DELHI/NASHIK: With onion prices continuing to be on fire in the run-up to crucial state polls, an embattled government scrambled to stem the surge but appeared to lack a coherent plan. As onion prices, defying the sharp dip in the rates in the country’s biggest wholesale market at Lasalgaon in Nashik, continued to spiral and touched the Rs 100 per kg mark in the city and elsewhere, panic in the government was obvious. Food minister K V Thomas rushed to Maharashtra as the Congress-ruled state accounts for 28% of the total onion production and can help tame prices by cracking down on hoarders. Read more of this post

The disease that killed a million piglets in China has spread to the US, and no one knows why

The disease that killed a million piglets in China has spread to the US, and no one knows why

By Heather Timmons 12 hours ago

America’s pork industry has been gripped by an outbreak of porcine diarrhea since mid-May, the first appearance of the condition in North America. US farmers havereported 768 cases of the disease, known as porcine epidemic diarrhea virus (PEDV), through the first week of October, which implies that many more thousands of animals could be affected. Although the disease is not transferable to humans, it has been devastating for the US pork industry. It causes severe “watery diarrhea and vomiting in nursing pigs,” according to information from the US’s National Pork Board. Almost all the piglets who get the disease die because of it, and farmers are reportedly filling “wheelbarrows of dead piglets.” Read more of this post

Investigative reporter detained after writing more than a dozen stories criticizing the finances of a major Chinese state-owned construction equipment maker

Free our reporter, begs newspaper as China cracks down on journalists

6:25am EDT

By Megha Rajagopalan

BEIJING (Reuters) – A Chinese newspaper pleaded with police on Wednesday to release an investigative reporter accused of defamation in an unusual public rebuke amid a wider government crackdown on freedom of expression. The state-run New Express tabloid printed a front-page commentary begging police in the south-central city of Changsha to set reporter Chen Yongzhou free under the headline: “Please release him.” Chen was detained after writing more than a dozen stories criticizing the finances of a major state-owned construction equipment maker. Read more of this post

Chinese Acquisition Appetites Shift From Resources

Chinese Acquisition Appetites Shift From Resources

CYNTHIA KOONS

Oct. 23, 2013 8:42 a.m. ET

When it comes to global mergers and acquisitions, China has long been seen as a buyer of natural resources but not much else. But bankers increasingly expect to see companies in industries like technology, real estate and food buying assets overseas, spurred by government policies and readily available financing. The increasing shift in appetite for hard assets or technologies has been noticeable in recent weeks, with Chinese personal-computer maker Lenovo Group Ltd. 0992.HK -0.48%considering a bid for struggling Canadian smartphone maker BlackBerry Ltd. BB.T -0.12%, which The Wall Street Journal reported last week. Should Lenovo pull the deal off, it would be one of the highest-profile deals done by a Chinese player on the global stage. Read more of this post

Glaxo’s China Sales Plunge 61% After Corruption Probe

Glaxo’s China Sales Plunge 61% After Corruption Probe

By Makiko Kitamura – Oct 23, 2013

GlaxoSmithKline Plc (GSK)’s third-quarter sales of pharmaceuticals and vaccines in China fell 61 percent after an anti-corruption probe began there in July, and the drugmaker gave no outlook on how long the downturn would last. Sales of consumer health-care products in China fell 29 percent, the London-based company said today in a statement. Total revenue rose 1 percent to 6.51 billion pounds ($10.5 billion), compared with analysts’ average estimate of 6.64 billion pounds. Read more of this post

ECB says stress tests of 124 eurozone banks begin next month

ECB says stress tests of 124 eurozone banks begin next month

POSTED: 23 Oct 2013 19:45
The European Central Bank said on Wednesday it will start next month to “stress-test” and examine the balance sheets of 124 eurozone banks in advance of assuming its supervisory role.

FRANKFURT: The European Central Bank said on Wednesday it will start next month to “stress-test” and examine the balance sheets of 124 eurozone banks in advance of assuming its supervisory role. “The assessment will commence in November 2013 and will take 12 months to complete,” the ECB said in a statement. It will be carried out together with national authorities and supported by an external consulting firm, it said. The “comprehensive assessment” will look at “key risks”, review the quality of bank assets and include “a stress test to examine the resilience of banks’ balance sheets to stress scenarios”. Aside from building transparency and taking any necessary corrective actions, the exercise aims at “confidence building” and “to assure all stakeholders that banks are fundamentally sound and trustworthy”. “A single comprehensive assessment, uniformly applied to all significant banks, accounting for about 85 percent of the euro area banking system, is an important step forward for Europe and for the future of the euro area economy,” ECB president Mario Draghi said in a statement. “Transparency will be its primary objective. We expect that this assessment will strengthen private sector confidence in the soundness of euro area banks and in the quality of their balance sheets.” This outcome will be published before the ECB assumes its supervisory role of eurozone banks in November 2014.

How sick are Europe’s banks? Wait and see

By Mark Thompson  @MarkThompsonCNN October 23, 2013: 10:01 AM ET Read more of this post

The struggle to tame Africa’s beast of a megacity

The struggle to tame Africa’s beast of a megacity

2:00am EDT

By Tim Cocks

LAGOS (Reuters) – A walk along the two kilometers of light rail that Lagos authorities have managed to build in three years gives a sense of how hard it is to impose order on one of Africa’s most chaotic cities. From either side of the concrete structure – no track has yet been laid – the crowded slums and highways of Nigeria’s lagoon-side commercial hub teem with activity. Its trademark yellow buses overtake, undertake and force their way down impossibly narrow side streets, where women stir pots next to canals clogged with rubbish. With between 15 million and 21 million people – the upper estimate is the official one, though no one really knows – and generating a third of GDP for Africa’s second biggest economy, Lagos has become almost as alluring to yield-hungry investors as it is to the 4,000 or so economic migrants who turn up each day. Read more of this post

China Tries to Clean Up Toxic Legacy of Its Rare Earth Riches

October 22, 2013

China Tries to Clean Up Toxic Legacy of Its Rare Earth Riches

By KEITH BRADSHER

TIANJIN, China — In northern China, near the Mongolian border, radioactively contaminated leaks from two decades of rare earth refining have been slowly trickling underground toward the Yellow River, a crucial water source for 150 million people. In Jiangxi province in south-central China, the national government has seized control of rare earth mining districts from provincial officials after finding widespread illegal strip-mining of rare earth metals. And in Guangdong province in southeastern China, regulators are struggling to repair rice fields and streams destroyed by powerful acids and other runoff from open-pit rare earth mines that are often run by violent organized crime syndicates. Read more of this post

China Intensifies Crackdown on Bond Market

China Intensifies Crackdown on Bond Market

10-22 14:32 Caijing

The long-term solution will be to reduce regulatory arbitrage by ending market segmentation and the current three-rail regulatory system.

By staff reporter Wang Xiaolu

A crackdown on bond market irregularities, triggered by a case involving a high-level Finance Ministry official in 2010, has been intensifying as of late. Heads of fixed income departments in several banks, brokerages, and fund companies have been investigated since March. As part of the latest development, Guosen Securities stated Oct. 11 that Sun Mingxia, head of the company’s fixed income unit, and other two executives at the unit were being investigated by the public security authorities. Read more of this post