Boardrooms Rethink Tactics to Defang Activist Investors

NOVEMBER 11, 2013, 5:06 PM

Boardrooms Rethink Tactics to Defang Activist Investors

By DAVID GELLES

Executives and board members used to fear hostile bids above all else. In response, they devised defense mechanisms like poison pills and staggered boards to thwart attacks. Today, hostile deals are on the wane, but a new threat has emerged that has put boardrooms on edge: activist investors. Read more of this post

Larry Summers: In China and India, Beware of ‘Asiaphoria’

November 12, 2013, 2:31 PM

Larry Summers: In China and India, Beware of ‘Asiaphoria’

With the top leaders of China’s Communist Party scheduled to release today their economic strategy for the coming decade, they would do well to consider the warning of former U.S. Treasury Secretary Lawrence Summers: Don’t count on fast growth to continue, and don’t get seduced by what he and fellow economist Lant Pritchett dub “Asiaphoria.” Read more of this post

Investors Still Seeking the Perfect China ETF

Investors Still Seeking the Perfect China ETF

It sounds more like a souped-up race car than a fund: the db X-trackers Harvest CSI 300 China A-Shares Fund (ASHR). As the first exchange-traded fund to give U.S. retail investors exposure to hard-to-access China A-Shares, which had been available only to Chinese citizens and a few qualified foreign institutions, it’s generating a lot of buzz. Read more of this post

Flush with fuel despite recently becoming the world’s largest net oil importer, China targets new markets from Africa to Australia

Flush with fuel, China targets new markets from Africa to Australia

4:31pm EST

By Jessica Jaganathan

SINGAPORE (Reuters) – From Africa to Australia, Chinese refiners are exploring new markets to ship surplus oil products such as jet fuel and diesel, putting them on track to compete with global trading houses and refining centers such as Singapore. The switch to being a growing exporter of fuel comes despite China recently becoming the world’s largest net oil importer. The opening of more refineries to process oil has emerged just as the world’s second-biggest economy shifts down a gear so there is less demand for some transport and industrial fuels, which are more sensitive to the pace of growth. Read more of this post

Internet Sows Doubt Over China Reform Plan; “It’s all a bunch of clichés. Looks like this new group doesn’t have what it takes to accomplish actual, meaningful reform.”

November 12, 2013, 9:34 PM

Internet Sows Doubt Over China Reform Plan

China’s Communist Party released the report on its pivotal four-day policy planning meeting in dribs and drabs online on Tuesday evening. Primed by weeks of state media reports promising grand reforms – the party mouthpiece People’s Daily said it “will have an important and far-reaching effect in pushing ahead with socialism with Chinese characteristics” — China’s Internet users were largely underwhelmed. Read more of this post

Even Native Chinese Speakers Aren’t Sure What The Government Said About Market Reform

Even Native Chinese Speakers Aren’t Sure What The Government Said About Market Reform

SAM RO NOV. 12, 2013, 4:50 PM 700 1

China’s ruling Communist Party wrapped up its so-called “3rd Plenum” meetings today. And there wasn’t anything too exciting that came out of it. Early media reports suggested that the China’s leaders wanted the markets to play a bigger role in the economy. But Bank of America Merrill Lynch’s Ting Lu warned that it was extremely unclear if they actually said anything new. From Lu’s note: Not so meaningful semantic change on the role of “market”

The communique changes the role of “Market Economy” from “基础性 (Jichuxing)” (used in the past 20 years) to “决定性 (juedingxing)”. For native Chinese speakers like us with years of intensive training in Chinese (and we did well on the grueling GRE too), we found it very difficult to tell the real difference. Bloomberg translated “ 基础性 (Jichuxing)” to “basic”, but we think it could be translated to “fundamental (foundational)” or “essential” as well. Regarding “决定性 (juedingxing)”, it could be translated to “deciding”, “determining” or “decisive”. We suspect the Chinese people won’t interpret too much from this change. No matter how you interpret it, it’s clearly not a game-changer.

China’s Third Plenum Concludes Big On Promises, Hollow On Actions

China’s Third Plenum Concludes Big On Promises, Hollow On Actions

Tyler Durden on 11/12/2013 08:05 -0500

A few hours ago, the “historic” and “most important ever” (just like ever payrolls report) Chinese plenum concluded. And like everything out of China, it was big on promises and scant on details. Among the numerous assurances of reform, the plenum promised: to deepen reform of the medical system and in the education sector, to speed up free trade zone development, to clear barrier in markets, to deepen national defense and military reform, to reform the income distribution system, reiterated the main role of public ownership and said there would be reform of government-market relations. And all of this would yield results by 2020. Essentially, words so hollow one can’t help but doubt this was merely the latest smokescreen to justify the perpetuation of the status quo, investment-based economy which as the BBG Brief chart below shows, instead of becoming more consumption driven which is what China has been feverishly attempting to achieve, has instead become ever more reliant on consumption. Read more of this post

China Keeps Plan Decisively Vague; Beijing Delivers a Squishy Reform Agenda After a Big Communist Party Meeting, With Promises for More Details Down the Road

China Keeps Plan Decisively Vague

Beijing Delivers a Squishy Reform Agenda After a Big Communist Party Meeting, With Promises for More Details Down the Road

AARON BACK

Updated Nov. 12, 2013 7:24 p.m. ET

The Chinese Communist Party’s secretive meeting has come and gone, but President Xi Jinping‘s economic agenda remains a mystery. Ever since Mr. Xi became China’s top leader last year, investors and business executives have been told to wait until this fall’s so-called Third Plenum to get an idea of what his economic policies will be. Yet the statement that followed the conclusion of this meeting Tuesday didn’t clear the air. Granted, there was one reassuring message that stood out in a verbose communiqué following the conclave: Market forces will play “the decisive role” in allocating resources. Read more of this post

After Long Wind-Up, Xi Delivers Anticlimax; For months, anticipation has been building about a plan to illuminate the way ahead for President Xi’s Chinese rejuvenation. Yet, what emerged was piecemeal and selective

After Long Wind-Up, Xi Delivers Anticlimax

ANDREW BROWNE

Nov. 12, 2013 1:32 p.m. ET

BEIJING—For months now, anticipation has been building in China about a Communist Party meeting that would, it was officially promised, offer up a “comprehensive” plan to illuminate the way ahead for President Xi Jinping‘s goal of national rejuvenation. Read more of this post

Starbucks ordered to pay Kraft $2.76 billion in damages for pulling out early from a distribution deal

Starbucks to Pay $2.76 Billion to Settle Grocery Dispute

Starbucks Corp. (SBUX) said it would pay Mondelez International Inc. (MDLZ) $2.76 billion to settle a dispute over the coffee-shop chain’s bagged coffee business. The payment, ordered by an arbitrator, consists of $2.23 billion in damages and $527 million in interest and attorneys’ fees, Seattle-based Starbucks said today in a statement. The company said it has adequate cash and borrowing capacity to fund the payment and will book it as a charge to its fiscal 2013 operating expenses. Read more of this post

Kmart is introducing a rent-to-own program charging the equivalent of 100-plus percent annual interest, a move into a business that has drawn criticism for hurting low-income consumers

New Kmart Rent-to-Own Program Turns $300 TV Into $415 Buy

Kmart is introducing a rent-to-own program charging the equivalent of 100-plus percent annual interest, a move into a business that has drawn criticism for hurting low-income consumers. The Lease-to-Own program touts instant gratification — customers without credit take a product home right away, make biweekly payments, then decide whether to buy out or return the product. A typical deal could turn a $300 television into a $415 purchase. Sears Holdings Corp. (SHLD), which owns Kmart, debuted a similar program at its namesake stores earlier this year. Read more of this post

H&M Grabs More Control of Asia Factories Amid Bangladesh Unrest

H&M Grabs More Control of Asia Factories Amid Bangladesh Unrest

Three decades after it started doing business with suppliers in Bangladesh, Hennes & Mauritz AB (HMB) is seeking greater control of production in a nation where it is among the largest purchasers of clothing. H&M this year agreed to become the sole client of two factories in Bangladesh and one in Cambodia, helping convince building owners to offer satisfactory conditions and wages, Anna Gedda, H&M’s social sustainability manager, said. Read more of this post

The End of the Tractor Boom

November 12, 2013, 4:48 PM

The End of the Tractor Boom

By Bob Tita

Sales of farm equipment wilted during October, foreshadowing a long-anticipated decline in North American farm machinery demand next year. Retail sales of farm tractors in the U.S. and Canada slipped 1.5% last month from a year ago, according to unit sales figures released by the Milwaukee-based Association of Equipment Manufacturers. Sales of high-horsepower tractors held up, rising 5% against a tough year-ago comparison. But sales of the four-wheel-drive tractors, an expensive tractor used mostly on large farms, dropped 18%. Moreover, sales of harvesting combines crashed 28% from record volumes of a year ago. Read more of this post