Foreign firms heading home as benefits wane in China

Foreign firms heading home as benefits wane in China

Friday, Nov 01, 2013

Matt Hodges

China Daily/Asia News Network

CHINA – For Dutch engineering and electronics conglomerate Philips NV, improved automation and smarter robots meant it made more sense financially to build a new factory in Drachten last year than extend its operations in China. Philips found the robots to be more productive than workers in Guangdong in southern China, where it, like many other foreign multinationals, faces rising labour and raw material costs and occasional staff shortages. Read more of this post

For Rural Bank, Being Big Also Means Big Complexities

11.01.2013 11:53

For Rural Bank, Being Big Also Means Big Complexities

Postal Savings started out large and has only grown, but its heft means making changes is hard, its president says

By staff reporters Zhang Yuzhe and Ling Huawei

(Beijing) – Understanding the complexity of the Postal Savings Bank of China (PSBC) – a spin-off of the postal service operator and now the seventh-largest bank in the country – is difficult even though more than six years have passed since it was established. The bank has never tapped the capital market for funds and thus has never been required to publish its financials. As a latecomer to banking, it is sitting on a huge stash of money that other big lenders have kept coming to for help whenever liquidity tightened. Read more of this post

Counting ships, cargos – the guessing game in trading China oil

Counting ships, cargos – the guessing game in trading China oil

2:30pm EDT

By Manash Goswami

SINGAPORE (Reuters) – What do the Chinese cities of Qingdao, Ningbo and Dalian have in common and what’s the quickest way of getting from one to the other? If you are an oil investor or trader and haven’t figured it out yet, you may be giving your competitors a head start. China’s rising fuel demand saw it overtake the United States as the world’s top net oil importer last month. As China’s importance for global oil markets grows, traders looking for an edge are hunting for smarter ways to assess demand and supply in a country that publishes relatively little energy sector data. Read more of this post

Chinese I.P.O.’s Try to Make a Comeback in U.S. after several years of accounting scandals that pummeled their share prices and prompted scores of companies to delist from markets in the United States

NOVEMBER 1, 2013, 8:52 AM

Chinese I.P.O.’s Try to Make a Comeback in U.S.

By NEIL GOUGH

HONG KONG — Chinese companies are trying to leap back into the United States stock markets. The return, still in its early days and involving just a handful of companies, comes after several years of accounting scandals that pummeled their share prices and prompted scores of companies to delist from markets in the United States. But the spate of recent activity suggests investors may be warming once more to Chinese companies that seek initial public offerings in the United States. Read more of this post

China bans promoting infant formula in hospitals

China bans promoting infant formula in hospitals

Staff Reporter

Infant formula producers have been forbidden from promoting their products in hospitals and to the families of newborn babies in China, reports the official English-language China Daily. Chinese authorities announced the ban on Tuesday after French food giant Danone was found bribing hospital workers to feed babies their products under another brand name — Dumex — in September. The National Health and Family Planning Commission has issued a similar ban. Read more of this post

China bans officials sending new year cards at public expense

China bans officials sending new year cards at public expense

7:44am EDT

BEIJING (Reuters) – China’s ruling Communist Party on Friday banned officials from sending or printing new year cards or calendars if they have been paid for with public funds, the latest step in the government’s crackdown on waste, extravagance and graft. “The printing and production are more and more extravagant, and the waste is greater and greater,” the central government said on its main website (www.gov.cn). Read more of this post

Brazil thinks it’s being colonized by China, and wants its economy back

Brazil thinks it’s being colonized by China, and wants its economy back

By Gwynn Guilford @sinoceros November 1, 2013

Some Chinese companies think Brazil’s giving them a bum deal—and vice versa. Reuters/Sergio Moraes

Brazil and China can’t seem to agree on what either country is getting out of their economic ties. Take this most recent example: China Construction Bank, a huge state-owned lender, just sunk around $716 billion into a 72% stake in Brazil’s Banco Industrial e Comercial, a nearly 19% premium (paywall) on BicBanco’s current share price. Some might argue that the move positions CCB to profit from Chinese investment in Brazil. But to hear the head of another Chinese bank tell it, that might be a naive move. Read more of this post

Bid War for Cheese Heralds 13% Warrnambool Bump; Bega Jumps as Fonterra Buys Stake in Cheese Bidder

Bid War for Cheese Heralds 13% Warrnambool Bump: Real M&A

A three-way bidding war for Australian cheese that is already leading to one of Asia’s most expensive food deals is poised to become even pricier. Saputo Inc. (SAP) of Montreal offered $425 million for Warrnambool Cheese & Butter Factory Co. (WCB) last month, beating two bidders with a record premium for a peer in Asia, according to data compiled by Bloomberg. After Japan’s Kirin Holdings Co. (2503) this week bought about 10 percent of Warrnambool for more than Saputo’s proposed takeover price, bids may rise even higher, said RBS Morgans Ltd. Read more of this post

Australians Ride Housing With Pensions Not So Super

Australians Ride Housing With Pensions Not So Super

Howard Kindler, 57, dipped into his pension to turn property investor, spending a third of his retirement savings and taking out a mortgage to buy a Melbourne apartment. Disappointed with the returns of his retirement fund, Kindler is one of the million Australians who go it alone and manage their own pensions, known as self-managed superannuation funds or SMSFs that together hold A$500 billion ($474 billion) in assets. Many are increasingly banking on surging home prices to provide a comfortable retirement, and like Kindler, are leveraging their investment, expecting higher returns. Read more of this post

Forecasts From Nissan and Sony Provide Japan Inc. Reality Check

Forecasts From Nissan and Sony Provide Japan Inc. Reality Check

MAYUMI NEGISHI and HIROYUKI KACHI

Nov. 1, 2013 7:21 p.m. ET

TOKYO—Surprise cuts in profit forecasts from Nissan Motor Co. 7201.TO -2.14% andSony Corp. 6758.TO -11.13% are giving pause to believers in Japan’s corporate recovery and highlight the risks still facing the country’s biggest brands. Nissan cut its full-year profit outlook by 15% on Friday, blaming weakness in emerging markets and big recall costs, and overhauled its management. Read more of this post

Festival Demand Eludes India’s Top Auto Makers

Festival Demand Eludes India’s Top Auto Makers

October Sales Increase Marginally at Maruti and Hyundai Unit, Fall at Tata Motors and Mahindra

SANTANU CHOUDHURY

Updated Nov. 1, 2013 11:05 a.m. ET

NEW DELHI—India’s ongoing festival season has failed to enliven the automobile market as the country’s top auto makers posted lower or nearly flat sales in October. Maruti Suzuki India Ltd. 532500.BY +0.28% and the local unit of Hyundai Motor Co., the country’s largest car makers by sales, Friday reported marginal increase in sales from October last year. At Tata Motors Ltd. 500570.BY +0.91% and Mahindra & Mahindra Ltd.500520.BY +2.03% , sales fell in the past month. Read more of this post

Pawnbrokers shine in Singapore as middle class feel the pinch

November 1, 2013 12:02 pm

Pawnbrokers shine in Singapore as middle class feel the pinch

By Jeremy Grant in Singapore

At a pawnshop in Bendemeer shopping centre in Singapore, Janani Amirthalinga is swapping a gold bangle, ring and pair of earrings to pay her daughters’ school fees. “My husband and I have just bought a house so all my money’s stuck there,” Mrs Amirthalinga says. Even though she earns S$3,000 ($2,400) a month as an administrator and her husband works as well, the monthly family income is insufficient, she says. Read more of this post

Why It’s Time to Reassess Your Emerging-Market Strategy: From Emerging to Diverging Markets

Why It’s Time to Reassess Your Emerging-Market Strategy: From Emerging to Diverging Markets

by Harold L. Sirkin and David C. Michael

OCTOBER 29, 2013

Sharp swings in exchange rates. Swooning equity markets. Slowing growth. Investors in emerging markets over the past three decades have seen all these warning signs before. And when they flash in a number of economies simultaneously, the outcome often is not good. So what should we make of the volatility that seems to be suddenly sweeping some of the world’s most dynamic developing economies, including China, India, Brazil, Turkey, South Africa, Indonesia, and Mexico? For more than a decade, the economic success of these emerging markets has driven global growth and lifted millions of people out of poverty. Companies that built international businesses around such markets have found important new sources of growth and lowered their costs. Read more of this post

Rents force Chinatown locals to ponder long march to suburbia

November 1, 2013 7:55 pm

Rents force Chinatown locals to ponder long march to suburbia

By Amie Tsang in London, Anjli Raval in New York and April Dembosky in San Francisco

For Lawrence Cheng, the arrival of another betting shop in London’s Chinatown district is one more nail in the coffin of the immigrant business community whose colourful, lantern-laced streets have been part of the capital since the 1950s. “We need another betting shop like we need a hole in the head,” says Mr Cheng, a restaurant owner who serves as secretary-general at the London Chinatown Chinese Association. “Within 60 yards of where you’re sitting there are seven or eight bookies.” Read more of this post

Pricewaterhouse Takeover of Booz Risks Culture Clash

NOVEMBER 1, 2013, 3:18 PM

Pricewaterhouse Takeover of Booz Risks Culture Clash

By KEVIN ALLISON

PricewaterhouseCoopers’ proposed takeover of the strategy firm Booz & Company would be the most prominent example yet of a Big Four auditor bulking up on consulting. But restrictions enacted after the Enron scandal of 2001 mean advisory services employees could end up battling with accountants over clients. While the midsize Booz & Company may feel pressure to compete with rivals like Boston Consulting Group and McKinsey & Company, the proposed deal with PricewaterhouseCoopers risks a huge culture clash. Read more of this post

Pirates Hauling $400 Million Since ’05 Pocket Little of Booty; Pirates off the Horn of Africa pocket as little as 0.01% of ransoms, which they tend to spend on alcohol, expensive cars, while financiers keep 75% of loot

Pirates Hauling $400 Million Since ’05 Pocket Little of Booty

Pirates off the Horn of Africa pocket as little as 0.01 percent of ransoms, which they tend to spend on alcohol, expensive cars and prostitutes, while financiers keep as much as three-quarters of the loot, a new report shows. The 129-page joint report by the World Bank, Interpol and the United Nations’s crime unit opens a window into their operating rules and lifestyle. It also shows the crime has evolved from locally funded operations to transnational networks, costing the global economy about $18 billion in increased trade expenses. Read more of this post

Norway’s $810 billion sovereign wealth fund, the world’s largest, is finding its record size is becoming a hurdle that’s complicating its investment decisions

World’s Biggest Wealth Fund Says Record Size Is Posing Hurdles

Norway’s $810 billion sovereign wealth fund, the world’s largest, is finding its record size is becoming a hurdle that’s complicating its investment decisions. “The challenge that we have, and we have already experienced, is the size,” Petter Johnsen, chief investment officer for equities at fund, said today after a speech in Gjoevik, north of Oslo. “The fund has grown very fast during a short time.” Read more of this post

Money laundering taints wine trade; while vineyards in France are favoured investments for Chinese and Russian money launderers, it’s only the tip of the iceberg in terms of trade-based ‘dirty money’ schemes

Money laundering taints wine trade

Monday, 28 October, 2013, 9:36pm

Avi Jorisch says while vineyards in France are favoured investments for Chinese and Russian money launderers, it’s only the tip of the iceberg in terms of trade-based ‘dirty money’ schemes

Bucolic regions in the south of France represent the newest frontier for law enforcement and intelligence officials searching for dirty funds. Since 2008, thousands of people with alleged criminal connections have reportedly arrived in southwest France from eastern Europe, Hong Kong and mainland China to snap up vineyards to launder their money. European and Asian officials must take steps and curb this trend, including establishing trade transparency units to combat trade fraud. Read more of this post

Global Wine Shortage A Boon For New World Exporters

Global Wine Shortage A Boon For New World Exporters [REPORT]

by Marie CaburalNovember 1, 2013

Wine lovers might end up paying higher prices in the near future for their next bottle because there’s currently a global shortage of wine. Consumer demand for wine is increasing, but the supply is not enough, according to a report.

Increase in demand

The report from Morgan Stanley (NYSE:MS) financial services indicated that the demand for wine “exceeded supply by 300 million cases in 2012.” According to the report, the wine shortage was the “deepest shortfall” recorded in the history of the wine industry over the past 40 years. Read more of this post

Fed to Test Banks for Interest Rate Rise, Housing Collapse

Fed to Test Banks for Interest Rate Rise, Housing Collapse

The Federal Reserve said it will examine how the biggest banks might react to a jump in long-term interest rates and another housing crash as it released the next round of stress-test scenarios designed to monitor the ability of the U.S. financial system to withstand economic shocks. The central bank mentioned that as part of two adverse scenarios it will gauge bank resilience against declines in the prices of high-risk, high-yield loans and debt and some high-priced real estate markets around the country, according to a statement released in Washington today. The central bank also inserted a test for large trading and clearing banks on counterparty default. Read more of this post

A Once-a-Year Investing Opportunity; Many stocks are artificially depressed by year-end tax-loss selling

A Once-a-Year Investing Opportunity

Many stocks are artificially depressed by year-end tax-loss selling.

MARK HULBERT

Nov. 1, 2013 6:52 p.m. ET

One of the year’s best trading opportunities is about to come around. Some even refer to it as a “free lunch.” The strategy involves buying stocks in the last few weeks of the year that are artificially depressed after investors sell them off for tax reasons. Often, these stocks bounce back nicely in January after this selling has abated. You should begin now to prepare the list of stocks you would want to buy should “tax-loss selling,” as it is called, depress their prices. Such selling has begun as early as November in recent years, and some traders have immediately snatched up the resultant bargains. You could miss out on some great deals if you wait until late December to act. Read more of this post

Why can’t banking be more like baking?

November 1, 2013 6:32 pm

Why can’t banking be more like baking?

By Tim Harford

The last time a bread maker laid waste to the City was 1666, writes Tim Harford

“It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.” Adam Smith, The Wealth of Nations

A tender medallion of steak, a foaming pint of bitter and a crusty roll still hot from the oven – no wonder that Adam Smith chose an alliterative trio of artisanal food providers to make his point about the benefits of capitalism. If he had chosen a junk bond salesman, a fund manager, and a quantitative analyst, wielding a Gaussian copula in an effort to price a synthetic credit derivative, his defence of the market mechanism might not have resonated down the centuries in quite the same way. Read more of this post

Spain-Based Fagor, Europe’s Fifth Largest Appliance Maker, On Verge Of Bankruptcy

Spain-Based Fagor, Europe’s Fifth Largest Appliance Maker, On Verge Of Bankruptcy

Tyler Durden on 11/01/2013 17:46 -0400

There has been much media insinuation in recent months that just because Spain’s economy has virtually shuttered, and imports have slid to unprecedented low levels in the process pushing the (adjusted) GDP beancount positive for the first time in 3 years, that things are somehow getting better. What the media has roundly ignored is that as a result of the collapse in consumption and end demand, courtesy of an unemployment rate that at least according to Eurostat just rose to a new record high, the companies that actually operate in Spain and form the basis for any real economic growth, are shuttering at an unprecedented pace. Of note: Spanish electrical appliance maker Fagor, which employs 5,700 people worldwide, or in a few shorts months, employed, is one step closer to bankruptcy after its Polish subsidiary filed for protection from its creditors. The company, which claims to be the fifth-biggest electrical appliance company in Europe, had trading of its debt suspended after its mother firm – private Spanish conglomerate Mondragon – refused to pour in money to rescue the company. Fagor makes washing machines, refrigerators and other appliances at 13 factories in five countries. Or, in a few shorts months, made.

AFP reports:

31 OCTOBER 2013 – 20H58

Major Spain appliance-maker Fagor risks bankruptcy

Spanish electrical appliance maker Fagor, employing 5,700 people worldwide, slid closer to bankruptcy as its Polish subsidiary filed for protection from its creditorsSpanish electrical appliance maker Fagor, employing 5,700 people worldwide, slid closer to bankruptcy as its Polish subsidiary filed for protection from its creditors Read more of this post

Indonesia capital raises minimum wage by 11 per cent amid tepid call for more

Indonesia capital raises minimum wage by 11 per cent amid tepid call for more

Friday, Nov 01, 2013

Reuters

JAKARTA – Indonesia’s capital raised its minimum wages by 11 per cent on Friday, far below demands for a 50 per cent rise during a two-day strike that failed to draw the millions hoped for by labour unions. Police put Friday’s turnout on the streets of Jakarta and neighbouring industrial areas in the thousands only, with two of the three major unions staying at work, saying a repeat of last year’s 44 per cent increase could jeopardise jobs at the time when growth is slowing. Read more of this post

Clarifying SGX’s clarification on the “penny” stock scandal in Singapore

Clarifying SGX’s clarification

Friday, Nov 01, 2013

R Sivanithy

The Business Times

In response to the tumultuous events of the past three weeks involving the speculative trio of stocks Asiasons, Blumont and LionGold, the Singapore Exchange (SGX) last Friday issued a detailed clarification to correct what it believes are misconceptions about its role as frontline market regulator. Clearly intended to be the final word on the subject, SGX’s explanations are useful as they address gaps in the public’s understanding of the way regulatory matters are handled and how the exchange views its role. Last Friday’s release should be compulsory reading for all parties interested in regulatory matters, how discipline is maintained in daily trading, and overall governance. Read more of this post

Starbucks Gets Ready to Go From Tall to Venti in China

Starbucks Gets Ready to Go From Tall to Venti in China

By Venessa Wong November 01, 2013

The last year, according to Starbucks (SBUX) Chief Executive Officer Howard Schultz, has been “without question the best year in its 42-year history.” Bullish numbers back up his triumphalism, even if quarterly results trailed analysts’ estimates: a 7 percent increase in global same-store sales, a 24.4 percent surge in profit, and 1,700 new stores around the world.

Read more of this post

Go on, bet the farm: At a crucial gathering, China’s leader must push for bold change, particularly in the countryside

Go on, bet the farm: At a crucial gathering, China’s leader must push for bold change, particularly in the countryside

Nov 2nd 2013 |From the print edition

WHEN colleagues complain that meetings achieve nothing, silence them with eight leaden words: “third plenary session of the 11th central committee”. This five-day Communist Party gathering in December 1978 utterly changed China. Two years after the death of Mao Zedong, it put the thrice-purged Deng Xiaoping at the helm, raised the importance of livelihoods above class struggle, loosened state controls and led to the opening of China to foreign trade and investment. In a nod to the left it still clung to the “people’s communes” in the countryside that had led to mass starvation under Mao; but with Deng in charge, they soon unravelled. The consequences affected a large chunk of humanity. Annual incomes were then $200 a head; today they are $6,000. For the rest of the world, everything the plenum accomplished is contained in the shorthand “China’s rise”. Read more of this post

For Rural Bank, Being Big Also Means Big Complexities

11.01.2013 11:53

For Rural Bank, Being Big Also Means Big Complexities

Postal Savings started out large and has only grown, but its heft means making changes is hard, its president says

By staff reporters Zhang Yuzhe and Ling Huawei

(Beijing) – Understanding the complexity of the Postal Savings Bank of China (PSBC) – a spin-off of the postal service operator and now the seventh-largest bank in the country – is difficult even though more than six years have passed since it was established. The bank has never tapped the capital market for funds and thus has never been required to publish its financials. As a latecomer to banking, it is sitting on a huge stash of money that other big lenders have kept coming to for help whenever liquidity tightened. Read more of this post