Indonesia Shuns 30-Year Tax Holiday, Says Other Incentives Exist for Investors; Samsung Electronics is looking to set up operations in Indonesia. Yet the government balks at granting any company a 30-year tax break

Indonesia Shuns 30-Year Tax Holiday, Says Other Incentives Exist for Investors

By Jakarta Globe on 08:07 pm Jun 23, 2014

Samsung Electronics is looking to set up operations in Indonesia. Yet the government balks at granting any company a 30-year tax break. (Reuters Photo/Tobias Schwarz)

Jakarta. Industry Minister M.S. Hidayat said that the government is flexible enough to provide necessary financial incentives to potential investors, but a 30-year tax holiday is out of the question.

“I’ll never advise anyone [in the government] to raise the tax holiday [period] to 30 years,” Hidayat said in Jakarta on Monday. “What I advise is for potential investors to negotiate on business-like [manners].” Read more of this post

“You’re only knocked out by the punch you don’t see,” Steady Road Takes Its Toll; Traders Stick to Bets That Stocks’ Placid Stretch is Coming to an End

Steady Road Takes Its Toll

Traders Stick to Bets That Stocks’ Placid Stretch is Coming to an End

CHRIS DIETERICH

June 23, 2014 5:05 p.m. ET

Traders are sticking to a losing bet that a placid stretch for stocks is coming to an end.

The CBOE Volatility Index, or VIX, an options-based measure of expected stock-market swings, last week hit its lowest level since 2007. The Dow Jones Industrial Average has gone 32 months without a 10% decline, the fifth-longest run on record. The S&P 500 hasn’t closed up or down 1% in 46 days, the longest stretch since 1995. Read more of this post

Andrew Ceresney on Where the SEC Is Headed

Andrew Ceresney on Where the SEC Is Headed

The Agency’s Head of Enforcement Talks About the Changing Nature of the SEC’s Efforts

June 23, 2014 4:19 p.m. ET

SEC Director of Enforcement Andrew Ceresney spoke with WSJ’s Francesco Guerrera at the CFO Network about the SEC’s recent enforcement strategy in regards to dark pools, high frequency trading and other new developments.

With the 2008 financial crisis in the rearview mirror, the U.S. Securities and Exchange Commission is turning its attention to an ambitious agenda for enforcing financial regulation.

Leading the way is Andrew Ceresney, the SEC’s head of enforcement. Read more of this post

Collateral Damage in China’s Commodity Pileup. For now, the rot seems limited to the surface. But that is only because investors have little visibility of what is at the heart of China’s financial system

Collateral Damage in China’s Commodity Pileup

AARON BACK

June 23, 2014 7:10 a.m. ET

The mysterious case of missing metals at a Chinese port is a headache for the global banks involved. It is also an omen of more widespread risks in the country’s financial system.

Several foreign banks including Citigroup Inc. C +1.52% and Standard CharteredSTAN.LN +0.95% PLC are investigating whether the same stocks of copper and aluminum, stored by a trading company at a Qingdao port, were pledged to all of them as collateral for loans. Deepening the intrigue, a major state-owned enterprise, Citic Resources Holdings Ltd. 1205.HK +0.79% , says some metals that it has stored at the Qingdao port can’t be located. Read more of this post

High Court Gives Companies More Room to Challenge Class Actions; Supreme Court Strikes Middle Ground on Securities Fraud Lawsuits in Case Involving Halliburton

High Court Gives Companies More Room to Challenge Class Actions

Supreme Court Strikes Middle Ground on Securities Fraud Lawsuits in Case Involving Halliburton

JESS BRAVIN and BRENT KENDALL

Updated June 23, 2014 5:46 p.m. ET

WASHINGTON—The Supreme Court on Monday gave companies more leeway to fend off securities-fraud lawsuits before trial, but it declined to overrule legal precedent that has undergirded investor class actions for more than two decades.

The decision, which came in long-running litigation involving Halliburton Co.HAL +0.19% ‘s asbestos liabilities, is a middle-of-the road outcome in a case that could have reset the board to better favor corporate defendants facing class-action lawsuits brought by investors. As a result of Monday’s ruling, companies can present evidence at an early stage in litigation to try to demonstrate that misleading public statements didn’t affect stock prices. The ruling means Halliburton will have an opportunity to present such evidence in a further effort to get the case thrown out in the lower courts. Read more of this post

U.S. Increases Scrutiny of Employee-Stock-Ownership Plans; Transactions That Cheat Workers Have Drawn Attention to Plans Millions Rely on

U.S. Increases Scrutiny of Employee-Stock-Ownership Plans

Transactions That Cheat Workers Have Drawn Attention to Plans Millions Rely on

RUTH SIMON and SARAH E. NEEDLEMAN

Updated June 22, 2014 8:52 p.m. ET

The federal government is stepping up scrutiny of how U.S. companies are valued for employee-stock-ownership plans, a vital source of retirement savings for millions of workers.

Some owners are selling stakes in their companies to employee-stock-ownership plans at inflated prices, the government says, jeopardizing those savings. Read more of this post

The Surging Stock Market: Too Late to Buy? How to Think About Investing When Prices Are This High

The Surging Stock Market: Too Late to Buy?

How to Think About Investing When Prices Are This High

BRETT ARENDS

June 21, 2014 8:19 p.m. ET

Main Street is starting to stampede. As the stock market surges to new highs, ordinary investors who missed a lot of the rise have been rushing to jump on board. So far this year they’ve poured $58 billion into stocks via mutual funds, according to the Investment Company Institute, the mutual-fund trade organization. That’s the biggest first half for mutual funds since the last big boom, in 2007. Read more of this post

EU Scales Back Ties With Thailand; Bloc Will Put Signing of Political Pact on Hold, Suspend Official Visits After Coup

EU Scales Back Ties With Thailand

Bloc Will Put Signing of Political Pact on Hold, Suspend Official Visits After Coup

LAURENCE NORMAN

June 23, 2014 2:58 p.m. ET

LUXEMBOURG—The European Union will scale back political ties with Thailand following the recent coup, putting on hold the signing of a political pact and suspending official visits, the bloc said Monday.

At a meeting of foreign ministers in Luxembourg, the EU also signaled it will freeze talks on a possible trade deal and said it could announce further penalties if the situation in Thailand deteriorates. Read more of this post

China’s ‘Crazy’ Local Government Bond Sale

Jun 23, 2014

China’s ‘Crazy’ Local Government Bond Sale

China’s bond markets turned a little strange Monday.

In a first for China, local government Guangdong Province sold debt in its own name, and surprised markets when the yields were lower than that sold recently by the central government. That’s unusual as investors would normally demand a higher return from a riskier issuer.

Guangdong Province sold five-year bonds, part of its planned 14.8 billion yuan ($2.4 billion) issuance, at 3.84% and lower than the 3.99% on a sale of bonds by the finance ministry earlier this month that were issued on behalf of local governments. Read more of this post

Rio Tinto’s Massive $6.2 Billion Oyu Tolgoi Mine in Mongolia Hits Another Snag; Operating Company Handed a New Audit Claiming Unpaid Taxes and Penalties

Rio Tinto’s Oyu Tolgoi Mine in Mongolia Hits Another Snag

Operating Company Handed a New Audit Claiming Unpaid Taxes and Penalties

ALEXIS FLYNN

June 23, 2014 11:38 a.m. ET

LONDON—One of Rio Tinto RIO.LN +1.61% PLC’s largest projects hit another snag Monday after the company running the $6.2 billion Oyu Tolgoi copper and gold mine in Mongolia was handed a new audit claiming unpaid taxes and penalties.

Turquoise Hill Resources Ltd. TRQ.T -3.18% , the Rio Tinto-owned mining company that owns the rights to Oyu Tolgoi, said it disputed the Mongolian Tax Authority’s claims and that a failure to resolve the issue before the end of the month could jeopardize the mine’s next phase of development. Read more of this post

Abenomics 2.0: Bold Goals, Modest Proposals

Abenomics 2.0: Bold Goals, Modest Proposals

Japan’s Prime Minister Tackles Economic Tradition

JACOB M. SCHLESINGER

Updated June 23, 2014 8:08 a.m. ET

TOKYO—When Japanese Prime Minister Shinzo Abe first announced his growth strategy a year ago, the stock market fell sharply in disappointment. Officials hope for a better response to the revised plan to be unveiled Tuesday.

The difference lies in part on more realism from investors, and less hype from a more low-key Mr. Abe. This isn’t about quick gains, but raising long-run prospects. Will it do that? Many proposals were watered down before final announcement. Abe aides say that raises prospects that something will actually get implemented.

“We made political compromises,” Hiroshige Seko, one of Mr. Abe’s top advisers, told The Wall Street Journal in an interview Monday. “We’re emphasizing execution, even if the plan gets a score of 80, instead of 100.” Read more of this post

Investors Prepare for Volatility Ahead of Indonesia Election

Investors Prepare for Volatility Ahead of Indonesia Election

JAKE MAXWELL WATTS

Updated June 23, 2014 7:03 p.m. ET

Investors are turning wary of Indonesian stocks ahead of a presidential election early next month that could make or break one of Asia’s best-performing markets.

Enthusiasm for Jakarta Governor Joko Widodo, the reformist frontrunner who had a strong early lead in the polls, has helped push Indonesian stocks up more than 13% this year. But as the race has grown tighter, some fund managers have held their bets or taken them off entirely while preparing for volatility. Read more of this post

Big Investors Missed Stock Rally; Pension Funds, University Endowments Diversified Into Other Investments With Disappointing Performances

Big Investors Missed Stock Rally

Pension Funds, University Endowments Diversified Into Other Investments With Disappointing Performances

GREGORY ZUCKERMAN

June 23, 2014 7:51 p.m. ET

Corporate pension funds and university endowments in the U.S. have missed out on much of the rally for stocks since 2009, following a push to diversify into other investments that have had disappointing performances.

The institutions, ranging from large corporations such as General Motors Co.GM +1.24% to big universities such as Harvard, have been shifting to hedge funds, private equity and venture capital. But while these alternative investments outpaced stocks during 2008’s market meltdown and are seen as potentially less volatile, they have badly lagged behind the S&P 500 since 2009, a period in which U.S. stock indexes have more than doubled. Read more of this post

In Japan, Hundreds of Shareholder Meetings on Same Day; This year, more than one in three companies will hold their meetings on Friday. Experts say the practice underscores Japanese companies’ dismissive attitude toward shareholders

CORPORATE GOVERNANCE

In Japan, Hundreds of Shareholder Meetings on Same Day

By HIROKO TABUCHI

JUNE 23, 2014 1:06 PM 1 Comments

Investors who own shares in Japanese corporations might want to clear their calendars next Friday.

At 10 a.m. on June 27, annual shareholders’ meetings kick off at more than 900 major Japanese companies across the country. That’s more than one in three companies traded on the Tokyo Stock Exchange. Read more of this post

Merger Fever Can Be a Menace for Shareholders; Deals often stroke the ego of chief executives. But they can also destroy much value

Merger Fever Can Be a Menace for Shareholders

JUNE 21, 2014

By JEFF SOMMER

Shareholders beware: M.&A. mania is back.

The numbers suggest that chief executives have a bad case of the seven-year itch: After eyeing other companies hungrily for so long, they have begun trying to buy them. Read more of this post

Son of former Philippines leader arrested in graft scandal

Son of former Philippines leader arrested in graft scandal

Monday, June 23, 2014 – 13:58

AFP

MANILA – Philippine police detained Monday the senator son of former president Joseph Estrada, the second high-profile official arrested within days over a massive corruption scandal.

Senator Jose “Jinggoy” Estrada, 51, gave himself up to police after the Sandiganbayan anti-graft court said it found probable cause to proceed with the charges and issued an arrest warrant. Read more of this post

The Hidden Cost of Trading Stocks; ‘Best Execution’ and Rebates for Brokers

The Hidden Cost of Trading Stocks

‘Best Execution’ and Rebates for Brokers

By THE EDITORIAL BOARDJUNE 22, 2014

There’s no escaping the conclusion that the stock market is not a level playing field where all investors, large and small, have an equal shot at a fair deal.

A recent groundbreaking study found that undetected insider trading occurs in a stunning one-fourth of public-company deals. Experts have long debatedthe pros and cons of high-frequency trading, another pervasive practice, but there is no doubt that it gives superfast traders the jump on others in trading stocks. And the very idea of trading on a public exchange, where stock prices and trading volumes are visible to all, is being eclipsed byprivate trading of public stocks in off-exchange venues, called dark pools, usually operated by banks. Read more of this post

Beijing’s Overhauls Get Short Shrift; Long-Term Plans to Revamp Economy Take Back Seat to Immediate Needs; Premier Pushes Spending

Beijing’s Overhauls Get Short Shrift

Long-Term Plans to Revamp Economy Take Back Seat to Immediate Needs; Premier Pushes Spending

MARK MAGNIER

June 22, 2014 9:13 p.m. ET

Construction workers labored at the site of a new bridge over the Yellow River in Zhengzhou, capital of central China’s Henan Province, in May. Li An/Xinhua/Zuma Press

BEIJING—Long-term economic overhauls that China’s leadership promised are taking a back seat to short-term needs as Beijing wrestles with a slowing economy and a foot-dragging bureaucracy. Read more of this post

Johor’s Forest City land reclamation project alarms Singapore

Johor’s Forest City project alarms Singapore

Monday, June 23, 2014 – 10:15

The Star/Asia News Network

PETALING JAYA – The Singapore government has confirmed that it is perturbed over Johor’s Forest City project involving massive land reclamation that could affect the island state.

“Given Johor’s close proximity to Singapore, we are naturally concerned about any possible transboundary impact on Singapore from property development projects that involve reclamation work in the Straits of Johor,” a Singapore Ministry of Foreign Affairs spokesman said in a statement. Read more of this post

Poll suggests more bank fundraisings in the pipeline

June 23, 2014 12:01 am

Poll suggests more bank fundraisings in the pipeline

By Sam Fleming

Bankers from dozens of European lenders questioned in an anonymous poll say their firm may need to raise further capital as it seeks to bolster its balance sheet and comply with regulatory demands.

Some 65 banks across the region either expect to raise capital or may need to do so, according to a survey by EY, the accountants. That is out of a total of 294 bankers questioned in interviews conducted during March and April.

Of the number, some 22 bankers were definitive in saying their company had plans to raise more capital. Read more of this post

UK Mittelstand to outpace European rivals

June 23, 2014 12:02 am

UK Mittelstand to outpace European rivals

By Brian Groom, Business and Employment EditorAuthor alerts

Britain’s neglected medium-sized companies expect to grow faster than their mainland European rivals during the coming year, but they are being held back by the UK tax system, business leaders say.

UK mid-market companies are narrowing the performance gap with Germany’s admired Mittelstand, according to research by GE Capital, the finance provider. Read more of this post

Shareholder activism catches fire in Japan

June 22, 2014 4:28 am

Shareholder activism catches fire in Japan

By Ben McLannahan in TokyoAuthor alerts

Shareholder activism is catching on in Japan.

A record 14 shareholder proposals for higher returns will be made at annual general meetings this month, according to IR Japan, a research firm.

Five are from a single investor – The Children’s Investment Fund of London – which will be coming back at Japan Tobacco on Tuesday with a similar set of resolutions to the ones rejected for the past two years. (Since then, though it denies any causation, JT has raised payouts.) The rest are from individuals and domestic institutions. Read more of this post

Banks speed up shift to forex automation in foreign exchange and rates trading as they move to slash costs and reduce the risk of further price manipulation scandals

June 22, 2014 5:43 pm

Banks speed up shift to forex automation

By Daniel Schäfer and Martin Arnold in LondonAuthor alerts

Banks including Barclays and UBS are accelerating a shift towards automation in foreign exchange and rates trading as they move to slash costs and reduce the risk of further price manipulation scandals.

Senior bankers are aiming to minimise human intervention because traditional trading over the phone has come under an intense regulatory spotlight. Authorities around the globe are investigating alleged manipulation of benchmarks such as currency fixes and interbank lending rates. Read more of this post

Central banks are planning to cut their exposure to longer-term debt to protect themselves from losses when the Federal Reserve ends its bond-buying this autumn, increasing the risk of instability in global markets

June 23, 2014 12:01 am

Central banks set to cut debt holdings

By Claire Jones in Frankfurt

Central banks are planning to cut their exposure to longer-term debt to protect themselves from losses when the Federal Reserve ends its bond-buying this autumn, increasing the risk of instability in global markets.

The majority of respondents in a survey of reserve managers who control assets worth $6.7tn, or more than half of central banks’ total reserves, said they were likely to adjust their portfolios in preparation of tighter monetary policy.

As the UK and US embark down the path back to more normal interest rates, big changes in asset holdings by other central banks around the world would heighten the risks of market disruption. Read more of this post

Corporate governance: the resurgent activist

Corporate governance: the resurgent activist

A rising level of shareholder resolutions at annual meetings has provoked a reaction from the business lobby, write Stephen Foley and Jennifer Bissel

The US Chamber of Commerce calls it “minoritarianism, the tyranny of a minority”. Dan Gallagher of the Securities and Exchange Commission says annual meetings have been “hijacked” by “corporate gadflies”. Leo Strine, the chief justice of Delaware, where most big US companies are registered, says shareholder democracy has wrought a “constant ‘model UN’ where managers are repeatedly distracted by referendums on a variety of topics proposed by investors with trifling stakes”. Read more of this post

Anglo-Saxon economies should envy Germany’s rental culture; There might, however, be another explanation for the resilience of the German economy: its approach to housing

June 22, 2014 7:29 pm

Anglo-Saxon economies should envy Germany’s rental culture

By Mark Schieritz

Housing bubbles triggered the biggest financial crisis in living memory, writes Mark Schieritz

There is no shortage of explanations for the resilience of the German economy: its companies are strong; its political and social institutions stable; and the skills of its engineers legendary. There might, however, be another explanation: its approach to housing. The country’s property market differs widely from those in the rest of the world – and particularly from those of most Anglo-Saxon countries. Read more of this post

Damodaran on Bubble, Bubble, Toil and Trouble: The Costs and Benefits of Market Timing

Monday, June 16, 2014

Bubble, Bubble, Toil and Trouble: The Costs and Benefits of Market Timing

If you believe that the stock market is in a bubble, you have lots of company. You have long-time market watchers, the New York Times and even a Nobel Prize winner in your camp. But what exactly is a bubble? How can you tell if you are in one?  And if you do believe you are in a bubble, what is your best course of action? Not only are these questions difficult to answer, but the answers can vary across markets, investors and time.
The Bubble Machine

Every market has a bubble machine, though it is less active in some periods than others, and that machine creates an ecosystem of metrics and experts, as well as warnings about bubbles about to burst, corrections to come and actions to take to protect yourself against the consequences. In periods like the current one, when the bubble machine is in over drive and you are confronted by “bubblers” with varying credibilities, motives and methods, you may find it useful to first categorize them into the following groups. Read more of this post