A New Challenge for Multinationals in China: Mao-era Politics

September 30, 2013, 1:53 p.m. ET

A New Challenge for Multinationals in China: Mao-era Politics

The ambitions of some of the world’s largest consumer brands in China are colliding with an unexpected new reality: hardball Mao-era politics.

ANDREW BROWNE

The ambitions of some of the world’s largest consumer brands in China are colliding with an unexpected new reality: hardball Mao-era politics. Increasingly, say China-based Western business executives, lawyers and consultants, a drive against alleged corporate price-fixing and corruption that has ensnared some of the biggest names in the global dairy and pharmaceutical industries has taken on a harsh political—and antiforeign—edge. Read more of this post

KKR to buy a 10 percent stake in appliance maker Qingdao Haier for 3.38 billion yuan ($552 million)

KKR Buys Stake in China Appliance Maker for $552 Million

KKR & Co. (KKR) agreed to buy a 10 percent stake in appliance maker Qingdao Haier Co. for 3.38 billion yuan ($552 million), the New York-based private-equity firm’s biggest investment in China. The Shanghai-listed unit of China’s largest appliance maker is selling 299.5 million shares at 11.29 yuan each to KKR in a private placement, the company said in a statement posted to the Shanghai Stock Exchange yesterday. That’s a 15 percent discount to the price on Sept. 12, the last day before Qingdao Haier suspended share trading pending an announcement. Read more of this post

Germans Think Small in China; Audi, BMW and Mercedes Are Speeding Up Plans to Offer Small Cars to Expand Sales

September 30, 2013, 4:17 p.m. ET

Germans Think Small in China

Audi, BMW and Mercedes Are Speeding Up Plans to Offer Small Cars to Expand Sales

COLUM MURPHY

SHANGHAI—German luxury auto makers are speeding up plans to offer a wider selection of small cars and sport-utility vehicles in China, hoping to lure Chinese consumers unable to afford a larger luxury car, or affluent buyers who want a less-expensive second car. Small luxury cars are still an oxymoron to many wealthy Chinese, but industry executives say the risks—including lower profit margins—are worth it because of the growth expected in compact, premium-brand vehicles. Read more of this post

Asia Losing $89 Billion a Year Failing to Recognize Women: Jobs

Asia Losing $89 Billion a Year Failing to Recognize Women: Jobs

At a booth in one of Manila’s biggest malls, 22-year-old Vanessa Tinitigan sells butter lip gloss from the U.S. and hair extensions from South Korea, part of a business she began at 16 that has made her the family’s main breadwinner. The self-taught entrepreneur, who also wholesales and exports fashion products, started her company, Purpektion Shop, as a schoolgirl with no formal financial education or access to funds. She now hires part-time workers to run stalls at bazaars and events. Read more of this post

Million-Dollar Hypercars Lure Elite to Swedish Craftsmanship

Million-Dollar Hypercars Lure Elite to Swedish Craftsmanship

A photo in Christian von Koenigsegg’s office shows one of the 41-year-old Swede’s limited-edition supercars — a 2011 Agera R, in fire-engine red — alongside a sparkly gold abomination that looks like it drove off the set of “Chitty Chitty Bang Bang.” The latter is a recreation of the car von Koenigsegg first saw at age 5 in a stop-motion Norwegian film called “Flaklypa Grand Prix,” which tells the story of a small-town bicycle repairman who builds a race car from scrap parts and — in the face of doubt and ridicule from established automakers — goes on to win the 24 Hours of Le Mans. Read more of this post

Toyota Calls Hybrids ‘Sturdy Bridge’ to Automotive Future; Chairman Uchiyamada Says No Major Market for All-Electric Cars

eptember 30, 2013, 12:35 p.m. ET

Toyota Calls Hybrids ‘Sturdy Bridge’ to Automotive Future

Chairman Uchiyamada Says No Major Market for All-Electric Cars

MIKE RAMSEY

WASHINGTON—Toyota Motor Corp. 7203.TO +0.80% is committed to hybrid, gasoline-electric vehicles and hydrogen fuel cell vehicles to displace the use of gasoline, said Takeshi Uchiyamada, chairman of the world’s largest auto maker. “The reason why Toyota doesn’t introduce any major [all-electric product] is because we do not believe there is a market to accept it,” Mr. Uchiyamada said in an interview following a speech on Monday at the Economic Club of Washington, D.C. Read more of this post

Some of the world’s biggest bond-fund managers, including Pimco and Blackrock, are bracing for a new phase in the rapid decline of Brazilian businessman Eike Batista’s empire: default.

September 30, 2013, 7:47 p.m. ET

Brazilian Magnate’s Woes May Jolt Bond Funds

Big Holders Include Pimco, BlackRock

EMILY GLAZER AND LUCIANA MAGALHAES

Some of the world’s biggest bond-fund managers, including Pacific Investment Management Co. and BlackRock Inc., BLK -0.12% are bracing for a new phase in the rapid decline of Brazilian businessman Eike Batista‘s empire: default. A group of six firms, including BlackRock and Allianz SE‘s ALV.XE -1.32% Pimco hold roughly half of the $3.6 billion in dollar-denominated debt issued by OGX Petroleo e Gas Participacoes SA, OGXP3.BR -25.00% Mr. Batista’s flagship oil company, according to people familiar with the situation. Read more of this post

The toll on coal: Increasing regulation and China’s slowing economy are threatening the fuel’s dominance

September 30, 2013 7:17 pm

Energy: The toll on coal

By Pilita Clark, James Wilson and Lucy Hornby

Increasing regulation and China’s slowing economy are threatening the fuel’s dominance

For the world at large, Wyoming still means Buffalo Bill and cowboy boots. For global energy markets, the sparsely populated US state has a more modern relevance – as the source of some of the largest coal reserves in the world. The Powder River Basin that stretches across much of the state has made Wyoming the US’s biggest coal producer. But coal industry executives received a shock in August when it was time to see which companies had bid for the rights to a new tract, said to contain nearly 150m tons of mineable coal in the federally controlled basin. Read more of this post

Storage Wars Seize Metals Market

September 30, 2013, 5:58 p.m. ET

Storage Wars Seize Metals Market

London Metal Exchange Gears Up to Change Storage Rules

TATYANA SHUMSKY

Controversy over the role of warehouses overshadowed the metals market, and traders and analysts are debating the likely impact of changes to storage rules now in the works. Metal-warehouse owners, which include banks and commodity-trading firms, are under increased scrutiny as the London Metal Exchange gears up to make a decision on metal-storage rules for its warehouse system. This warehouse network stretches from Detroit to Malaysia and is the world’s largest. Read more of this post

New Zealand Prime Minister John Key said limits on low-deposit home loans are something buyers have to tolerate if the nation wants to avoid faster interest-rate increases

Key Says N.Z. Loan Limits are Medicine Economy Needs to Swallow

New Zealand Prime Minister John Key said limits on low-deposit home loans are something buyers have to tolerate if the nation wants to avoid faster interest-rate increases. “Like all medicines, I don’t necessarily like having to swallow it either,” Key told TV3’s Firstline. “But what is the best thing overall for the economy?” From today, banks face restrictions on the amount of new home loans they can make when the deposit is less than 20 percent of a property’s value. The nation’s central bank, concerned a housing bubble is threatening financial stability, imposed the limit because raising interest rates might boost the currency and hurt the economy. Opponents of the loan limits “are telling you they want you to pay more for your mortgage,” Key said. “I want lower interest rates.” Reserve Bank Governor Graeme Wheeler said Sept. 12 that the limits lower the bank’s projection for 90-day bank bill yields by 30 basis points, or 0.3 percentage points. Still, he said the central bank will have to start raising rates next year. It expects yields to rise by 100 basis points by the end of 2014.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

Student-Loan Defaults Rise in U.S. as Borrowers Struggle

Student-Loan Defaults Rise in U.S. as Borrowers Struggle

About one in seven borrowers defaulted on their federal student loans, showing how former students are buckling under higher-education costs in a weak economy. The default rate, for the first three years that students are required to make payments, was 14.7 percent, up from 13.4 percent the year before, the U.S. Education Department said today. Based on a related measure, defaults are at the highest level since 1995. Read more of this post

Stock Investors See Slimmer Pickings; Stocks at Loftiest Levels in Years Compared With Profits

September 30, 2013, 7:38 p.m. ET

Stock Investors See Slimmer Pickings

Stocks at Loftiest Levels in Years Compared With Profits

TOM LAURICELLA

Some investors warn that the air is getting thinner for U.S. stocks, which head into the fourth quarter up 18% for the year and at their loftiest levels in years compared with corporate profits. The Dow Jones Industrial Average advanced 1.5% during the third quarter even as economic growth remained uneven. The resiliency of the stock market’s rally prompted several Wall Street strategists to throw in the towel on negative forecasts. Read more of this post

Mergers Market Loses Its Driver

September 30, 2013, 6:33 p.m. ET

Mergers Market Loses Its Driver

Fed Move Lowers Threat of Interest-Rate Increase

SHARON TERLEP

Fear that interest rates could jump further gave Verizon Communications Inc.VZ -0.69% extra motivation to plow ahead with its monster deal in September to buy the part of Verizon Wireless it doesn’t own, after years of talking about such a deal with seller Vodafone Group PLC. VOD.LN -0.55% Without the acquisition of Verizon Wireless, growth in deal activity would have been far more meager. Read more of this post

Lessons Learned in the Exchange-Traded Fund Graveyard

Lessons Learned in the Exchange-Traded Fund Graveyard

There are now 337 exchange-traded funds pushing up the daisies. More than 40 percent of those deaths by Darwin took place in the last 18 months, when ETF inflows have broken records. While ETF closures can be an inconvenience for investors in the short-term, in the long run they are healthy for the industry and investors. While some of the deaths are simply due to bad timing, closures help weed out weaker players and lead to higher-quality products. A recent article on the Index Universe web site said the rapid pace of closures “speaks more about an industry in growth mode than one in retreat.” A stroll through the ETF graveyard shows why some of the funds don’t last. Here’s a look at a few of the more famous defunct ETFs and the lessons we can take from their demise. Read more of this post

Lamborghini Signals Luxury Shift From China to U.S., Japan: Cars

Lamborghini Signals Luxury Shift From China to U.S., Japan: Cars

After years of profiting from China’s appetite for high-priced toys, makers of hyper-luxury cars are shifting their focus back to more traditional markets such as the U.S. and Japan. “The U.S. is really getting back on track and getting more important for us,” Lamborghini SpA Chief Executive Officer Stephan Winkelmann said in an interview in Tokyo. In China, “there is a slowdown in high-end luxury,” he said. Read more of this post