Emerging-Market Currency Rout Will Worsen Next Year, Jen Says

Emerging-Market Currency Rout Will Worsen Next Year, Jen Says

Emerging-market currencies will probably see bigger declines next year when the Federal Reserve actually starts tapering its record stimulus, Stephen Jen, co-founder of hedge fund SLJ Macro Partners LLP said. The Fed’s signal on May 22 that it may start reducing its $85 billion of monthly bond purchases caused the JPMorgan Emerging Markets Currency Index to drop 7.2 percent through the end of August. India’s rupee led the declines with a 16 percent loss during the period, followed by Brazil’s real at 14 percent and Indonesia’s rupiah at 13 percent. The gauge has since rallied 4.3 percent as the Fed unexpectedly decided to maintain its debt buying on Sept. 18. Read more of this post

Auto Makers Shift Gaze to ‘Emerging’ Emerging Markets

Auto Makers Shift Gaze to ‘Emerging’ Emerging Markets

Car Companies Look Past the BRICs

NEAL E. BOUDETTE

Oct. 22, 2013 1:27 p.m. ET

TROY, Mich.—The auto industry has been buzzing for the last couple of years about growth in the so-called BRIC markets –Brazil, Russia, India and China. Now the conversation is shifting to the Future 15—the next group of emerging markets beyond the BRICs that are expected to drive the industry forward. They include populous Asian nations of Indonesia, Thailand and Malaysia; Turkey, Saudi Arabia and Iran in the Middle East; South America’s Andean nations such as Chile and Argentina; and Morocco, Egypt and others in North Africa. Read more of this post

Beijing May Make ABCs Less Important After English-Training Boom

Beijing May Make ABCs Less Important After English-Training Boom

China’s capital city of Beijing proposed reducing the importance of English in education by cutting the language’s weighting on college-entrance tests in favor of the nation’s own tongue. English would count for 100 points, down from the current 150, out of the maximum score of 750 starting in 2016, the official Xinhua News Agency reported yesterday, citing the Beijing Education Examinations Authority. The possible score in Chinese would rise to 180 from 150, Xinhua said. The local government said English programs currently stress examinations over mastery of the language, according to Xinhua. Read more of this post

How Wall Street Fed Puerto Rico’s $70 Billion Borrowing Binge

How Wall Street Fed Puerto Rico’s $70 Billion Borrowing Binge

Seven years ago, in the wake of a government shutdown caused by a $740 million budget deficit, Puerto Rican officials vowed to fix the island’s finances by 2010. Now investors are calling their bluff. In the $3.7 trillion municipal-bond market, Puerto Rico and its agencies more than doubled their borrowing since 2004 to $70 billion this year. Even as the island’s population shrank and the economy contracted 16 percent since 2004, the government kept selling enough bonds to saddle each man, woman and child with $19,000 in debt. Read more of this post

Berkshire Beats Apple as Favorite Stock of Tiger 21 Group

Berkshire Beats Apple as Favorite Stock of Tiger 21 Group

By Margaret Collins – Oct 22, 2013

Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) regained its ranking as the favorite stock pick among U.S. and Canadian multimillionaires, beating Apple Inc. (AAPL) and fending off the increasing preference for exchange-traded funds. Members of Tiger 21, a New York-based group of wealthy investors, selected Berkshire in an annual survey of preferred investments scheduled to be released today. Apple, which had held the No. 1 spot the last two years, slipped to No. 2. “The bloom is off of Apple,” Michael Sonnenfeldt, founder and chairman of Tiger 21, said in an interview. “For people who held Berkshire Hathaway it’s held its appeal, but for Apple, a lot of people who were on that ride have realized that perhaps the best days are behind it.” Read more of this post

You’ll never be a Yale superman: How Yale’s influential endownment fund and its CIO are reining in their ambitions

You’ll never be a Yale superman

Dan McCrum

| Oct 22 12:02 | 4 comments | Share

David Swensen is an investing superman. His pioneering use of alternative investments after he took over the Yale endowment in 1985 prompted a thousand imitators and created an industry. Indeed, the Yale model became the endowment model, so widely was it embraced. Then, with alternative investments legitimised as suitable for big investors, pension funds began to follow his lead, albeit tentatively. Yet you can never be David. Or rather, you can never match up to the myth that Mr Swensen’s performance has become. Consider the recent decision by the $21bn Yale endowment to cut its allocation to private equity for the first time in eight years, to 31 per cent from 35 per cent. That shift may simply reflect a lack of opportunities at present, but note the long-term return target which Yale expects its private equity investments to deliver. Read more of this post

Cleaner air a bitter pill for north China cities

October 22, 2013 2:20 pm

Cleaner air a bitter pill for north China cities

By Lucy Hornby in Chengde

When people in Beijing put on their pollution masks, it makes international headlines. But the effort to clean up the air in northern China depends on steel-producing cities such as Chengde, whose three million people are more worried about jobs than smog. The authorities have become so concerned about the state of the air in the Chinese capital that they want the industrial cities of Hebei province that encircle Beijing to cut coal use and steel and cement capacity to ease the problem. Read more of this post

Thailand is considering slapping a 500-baht ($16.60) entry fee on tourists to help cover foreigners’ unpaid medical bills

Thailand considers charging all tourists to cover unpaid hospital bills

October 23, 2013 – 12:32AM

Thailand is considering slapping a 500-baht ($16.60) entry fee on tourists to help cover foreigners’ unpaid medical bills, officials say. “The policy is the result of foreign tourists who have accidents or fall sick in Thailand and seek treatment at our hospitals but then can’t pay their bills,” the Health Ministry’s deputy permanent secretary, Charnvit Phrathep, said. The unpaid hospital bills of foreign tourists cost the state about 700 million baht a year, the ministry said. Read more of this post

Australia to Raise Debt Ceiling as Mining Slowdown Bites

Australia to Raise Debt Ceiling

Move to Raise Debt Ceiling to $483 Billion as Mining Slowdown Bites

JAMES GLYNN and RACHEL PANNETT

Oct. 22, 2013 4:58 a.m. ET

SYDNEY—Australia’s new conservative government said it would seek to raise the ceiling on government borrowing to fund its policies and day-to-day operations, highlighting the dire state of the nation’s finances as a long mining boom cools. In doing so, the center-right Liberal-National coalition risks a rift with voters who identified rising government debt as a key concern in the lead-up to the Sept. 7 election. Read more of this post

How the Chinese Learned to Embrace Independent Travel; 70 percent of Chinese tourists traveling abroad are now choosing to go independently

How the Chinese Learned to Embrace Independent Travel

By Gabrielle Jaffe

For years, the prevailing image of Chinese travelers was this: masses of red-hat wearing people organized in tour groups, pouring out of big, noisy buses. But this stereotype is now out of date. According to a recent report from Hotels.com’s Chinese International Travel Monitor, 70 percent of Chinese tourists traveling abroad are now choosing to go independently. Read more of this post

Ghost cities springing up near China’s first-tier cities

Ghost cities springing up near China’s first-tier cities

Kao Hang and Staff Reporter

2013-10-22

China’s property prices have continued to boom, but the phenomenon of the so-called ghost cities, a result of high vacancy rates, has been worsening. In the past, the ghost cities were mainly third-tier or fourth-tier cities, but recently first-tier cities have also seen the rise of this phenomenon, with Shenzhen’s neighboring Daya Bay area going into an apparent state of hibernation, ringing alarm bells in relation to the abnormal development of the mainland property market, our sister paper Want Daily reports. Read more of this post

FTZ ‘Negative List’ Positively Disappoints Analysts; It’s too long, critics say, and worse yet a Shanghai official admits it is to some extent a copy of an existing catalog on foreign investment

10.21.2013 17:17

FTZ ‘Negative List’ Positively Disappoints Analysts

It’s too long, critics say, and worse yet a Shanghai official admits it is to some extent a copy of an existing catalog on foreign investment

By staff reporter Yu Hairong

(Beijing) – A closer examination of the Shanghai Free Trade Zone (FTZ) “negative list” in comparison with the policy that guides foreign investment elsewhere in the country has left many observers disappointed. Supposedly a big step toward greater openness, the list has aroused criticism for containing too many items – 190 special regulatory measures for roughly 17.8 percent of all industries in the country. Read more of this post

China: An Increasingly Risky Bet for Drug Makers

October 21, 2013, 7:34 PM

China: An Increasingly Risky Bet for Drug Makers

For the world’s largest pharmaceutical companies, China is an increasingly critical, yet risky bet. Multinational drug companies expect sales from China to continue to grow quickly, as they did last year, accounting for 3.8% of total sales, up from 3% in 2011, according to a new report from consultancy McKinsey & Co. Meanwhile, nearly half of the 50 senior pharmaceutical industry executives surveyed said that they expect China to account for over 10% of their global sales by 2020, when China is projected to become the world’s second-largest pharmaceutical market. Sales of 85 brands exceeded $50 million in China last year, with 11 surpassing $200 million, according to the study. Read more of this post

Rice losses at ‘Bt200 bn a year’

Rice losses at ‘Bt200 bn a year’

The Nation October 22, 2013 1:00 am

The Finance Ministry yesterday put the annual losses from the government’s controversial rice-pledging scheme in the vicinity of Bt200 billion after wrapping up its audit.
Supa Piyajitti, deputy permanent secretary and chairwoman of the audit team, did not disclose the exact figure from the audit report signed by her former boss Areepong Bhoocha-oom. Areepong was transferred from permanent secretary of the ministry to the post of secretary-general of the Public Sector Development Commission, reportedly for his inability to control Finance Ministry officials who repeatedly expressed concerns over the scheme’s impact on the national fiscal position. Read more of this post

With psy and currency swaps S. Korea grabs global influence

Updated: Tuesday October 22, 2013 MYT 7:12:59 AM

With psy and currency swaps S. Korea grabs global influence

SEOUL: From rapper Psy to overseas financial aid, an economically and culturally confidentSouth Korea appears to be taking on bigger neighbours Japan and China for the hearts and minds of the rest of Asia and beyond.Its most recent effort to leverage brand “Korea” – three currency swap deals worth more than $20 billion that were announced this month. South Korea had the seventh largest currency reserves in the world at the end of August, worth $331.1 billion, according to the Bank of Korea. It can easily afford to match cultural diplomacy with economic muscle as it competes with Japan and China for influence. Read more of this post

Market attention has been focused on Dongbu Group in recent weeks, based on fears that the group is dogged with an impending liquidity shortage like the ailing Tongyang Group

2013-10-21 17:22

Dongbu’s health still in question

By Kim Rahn

Market attention has been focused on Dongbu Group in recent weeks, based on fears that the group is dogged with an impending liquidity shortage like the ailing Tongyang Group. Despite the face saving denial by its chief, analysts remain skeptical of the group’s financial strength. This recent speculation has been influenced by the failure of some of Tongyang’s affiliates to pay maturing debts and filing for court receivership at the end of last month. Read more of this post

How should we promote Korea to the outside world? Going beyond K-pop and tradition

Going beyond K-pop and tradition

Oct 22,2013

by Daniel Tudor

How should we promote Korea to the outside world?
This is a question that comes up again and again in the media and in public life. It reared its head again recently with a rather bizarre “romantic mushrooms” campaign for Korean food in the United States. So much time and money is spent on promoting Korea and Korean culture that it constantly amazes me how counter-productive such campaigns are.
Since I am a foreigner (yawn), I expect some readers will consider this an “attack” on Korea, or at least, a “critical” article. Please do not take it that way. I am simply a person who fell in love with Korea as a tourist, and decided to stay. I want to promote Korea, so others can experience the same thing. This is why I want to openly offer my own suggestions on how Korea should and should not promote itself.  Read more of this post

Abenomics might eat itself, a Pettis production

Abenomics might eat itself, a Pettis production

David Keohane

| Oct 21 12:28 | 9 comments | Share

It may seem like an odd time to stress out about Japan running an overly aggressive current account surplus, which might in turn push Abenomics off the tracks, but since the fears over a deficit have been so well covered… This is from Michael Pettis, who argues that one of the automatic, if not always intended consequences of Abenomics is to really force up Japan’s current account surplus, and it’s not clear the world will be ready or able to absorb it. In his defense he’s looking a few years, rather than quarters, out: What matters, I think, is that in order to generate growth Tokyo is planning to implement polices aimed at raising both inflation and real GDP, and these policies are likely to force up the national savings rate relative to investment. Read more of this post

Indonesia’s anti-corruption website is now getting 1,000 crowdsourced reports every day

Indonesia’s anti-corruption website is now getting 1,000 crowdsourced reports every day

October 21, 2013

by Enricko Lukman

While a lot of people are skeptical that the Indonesian government has what it takes to build a good tech product, this is one of those cases where the government proves its skeptics wrong. It’s been six months since we discussed Indonesia’s anti-corruption weapon Lapor. The team behind Lapor, the President’s Delivery Unit of Development Monitoring and Oversight (UKP4), tells Tech in Asia that the site is proving popular. Lapor allows citizens to report on the wrongdoings of Indonesia’s government via a website, mobile app, or SMS. It could range from bribery by traffic officers to massive corruption by politicians. Read more of this post

Stiletto Networks Grow as Women Rise on Boards: Corporate India

Stiletto Networks Grow as Women Rise on Boards: Corporate India

Egon Zehnder International, an executive search firm, is getting three times as many calls as last year at its Mumbai office from Indian companies seeking women for board positions, spurred by a new law. Enacted in August by India’s parliament, the Companies Act requires every listed company to have at least one female director within a year, while others reporting minimum revenue of 3 billion rupees ($49 million) have three years to comply. The legislation and a scramble for qualified candidates are spawning girls-only networking forums through which they mentor and recommend each other, much like their Wall Street peers. Read more of this post

A legal dispute in Myanmar Brewery JV between F&N Singapore and its military-linked local partner is emerging as a crucial test for investment in the country as it opens up after decades of dictatorship

October 22, 2013 5:19 am

Trouble brewing in Myanmar

By Michael Peel in Yangon

A legal dispute in Myanmar between one of southeast Asia’s leading conglomerates and its military-linked local partner is emerging as a crucial test for investment in the country as it opens up after decades of dictatorship. Union of Myanmar Economic Holdings is battling Singapore-based Fraser & Neave, now owned by Thailand’s richest man, over the future of their Myanmar Brewery joint venture, in a case whose impact will felt by other multinationals looking to go into business with local partners. Read more of this post

Nokia’s diaspora starts again; The group’s decline has generated a new wave of entrepreneurship in its native Finland

October 21, 2013 3:38 pm

Nokia’s diaspora starts again

By Richard Milne in Helsinki

Harri Wallenius pulls out a meticulous dossier of newspaper clippings from a local Finnish newspaper. All document the €5.4bn sale of Nokia’s mobile phone business toMicrosoft. “My first reaction was shock,” he says. But the 53-year-old no longer works at Nokia. After “26 years and eight months”, in his precise engineer’s formulation, he stopped at the end of 2011 and took a redundancy package. Read more of this post

Rough ride in store for EM currencies; Pace of forex reserve drawdowns to rise for vulnerable economies

October 21, 2013 6:04 am

Rough ride in store for EM currencies

By Mark Haefele

Pace of forex reserve drawdowns to rise for vulnerable economies

Recent pressure on emerging market currencies has rightfully made headlines. But the broader issue for emerging markets is that such episodes could easily reoccur, or even get worse, over the next few years. This is because, over the past decade, these economies have increasingly pinned their economic hopes to foreign capital flows. The numbers speak for themselves; portfolio flows to the emerging markets have grown 400 per cent over the past 10 years, compared with nominal GDP growth of 200 per cent. And the same is true of the broader private capital measure, which also includes bank lending and direct investment. This has increased 5.5 times over the same period. Read more of this post

Emerging markets: While the sun shone; Only a few developing nations used their boom years to enact crucial structural reforms. This failure to pursue change has worried investors

October 21, 2013 7:32 pm

Emerging markets: While the sun shone

By Jonathan Wheatley and FT reporters

Only a few developing nations used their boom years to enact crucial structural reforms. This failure to pursue change has worried investors

In December 1994 Fernando Henrique Cardoso, president-elect of Brazil, made a speech before the country’s Senate. He held up a paper on which he had listed his priorities. It was a blueprint for profound reform of Brazil’s fiscal system and of its “economic order”, cutting across public spending, labour law, the judiciary and politics. Two decades later, despite a commodities boom and the rise of a new consumer class in the developing world, it is striking how little of Mr Cardoso’s work has been done. Read more of this post

Bundesbank warns of property bubble

Last updated: October 21, 2013 7:05 pm

German city apartments overvalued, warns Bundesbank

By Michael Steen in Frankfurt and Alice Ross in Baden-Baden

The Bundesbank has warned that apartment prices in Germany’s biggest cities could be overvalued by as much as 20 per cent, stepping up its concern about a real estate boom in the powerhouse of the European economy. The warning will feed into German concern that the European Central Bank’s monetary policy is far too loose for the country. The bank’s main refinancing rate is 0.5 per cent, a record low. Read more of this post