Business Trusts Gain Fans in Hong Kong; Hong Kong is home to just two business trusts, a fraction of the 15 in Singapore

Oct 14, 2013

Business Trusts Gain Fans in Hong Kong

By Prudence Ho

Hong Kong is poised to take a big step forward as a destination for business-trust listings in the region, with an electricity company and a hotel operator aiming to raise up to US$6 billion before the year is out. So far, Hong Kong is home to just two business trusts, a fraction of the 15 in Singapore, the dominant regional market for such listings. But tycoon Li Ka-shing’s plan to carve out and list the Hong Kong electricity assets from Power Assets Holdings Ltd. in the city, if successful, could be the biggest initial public offering in Asia this year, according to Dealogic data. Read more of this post

Stewart Cowley, the Bond-Fund Manager Who Can’t Stand Bonds; Convinced Bonds Are Due to Plummet, Fund Manager Bets Against Them

Stewart Cowley, the Bond-Fund Manager Who Can’t Stand Bonds

Convinced Bonds Are Due to Plummet, Fund Manager Bets Against Them

TOMMY STUBBINGTON and NEELABH CHATURVEDI

Updated Oct. 14, 2013 5:01 p.m. ET

Stewart Cowley manages $1.5 billion in the Old Mutual ODMTY +0.54% Global Strategic Bond Fund. One place he generally avoids investing that money: bonds. Mr. Cowley doesn’t hold conventional U.S. Treasury bonds. He doesn’t hold traditional U.K. gilts. He doesn’t hold Japanese government bonds. “I’m the bond manager who doesn’t like bonds,” he says, sitting in the modern London headquarters of Old Mutual Global Investors, a unit of Old Mutual PLC, which is a venerable City institution with roots going back to 19th-century Cape Town, South Africa. Read more of this post

No Payoff in Coca-Cola’s Thirst for Growth; It May Be High Time to Question Where the Drinks Company Is Putting Its Emphasis

October 14, 2013, 7:03 p.m. ET

No Payoff in Coca-Cola’s Thirst for Growth

It May Be High Time to Question Where the Drinks Company Is Putting Its Emphasis

SPENCER JAKAB

Coca-Cola KO +0.37% Zero is popular with soda drinkers, but zero isn’t flavor-of-the-month with shareholders. Coca-Cola Co.’s stock is flat over the past 12 months. But don’t expect the drinks giant’s management to accentuate the negative when third-quarter results are unveiled Tuesday. In its Vision 2020 goals, Coca-Cola seeks to double unit sales to three billion servings a day from 2009 levels. But achieving this would require a growth rate of nearly twice that. Read more of this post

Daniel Yergin: Why OPEC No Longer Calls the Shots

October 14, 2013, 7:26 p.m. ET

Daniel Yergin: Why OPEC No Longer Calls the Shots

The oil embargo 40 years ago spurred an energy revolution. World production is 50% higher today than in 1973.

DANIEL YERGIN

Forty years ago, on Oct. 17, 1973, the world experienced its first “oil shock” as Arab exporters declared an embargo on shipments to Western countries. The OPEC embargo was prompted by America’s military support for Israel, which was repelling a coordinated surprise attack by Arab countries that had begun on Oct. 6, the sacred Jewish holiday of Yom Kippur. Read more of this post

How Mongolia Brought Nomads TV and Mobile Phones

How Mongolia Brought Nomads TV and Mobile Phones

In global development, as in business, delivery can determine failure or success. The windswept steppes of Mongolia, among the world’s harshest environments, have become a testing ground for how best to deliver something increasingly important to Earth’s entire population: electricity. The conditions in rural Mongolia are forbidding. Winter temperatures on the steppes regularly drop to minus 30 degrees Celsius (minus 22 degrees Fahrenheit). Over a barren landscape three times the size of France, there are no paved roads. About a quarter of the country’s 2.8 million people herd goats and yaks. They shelter in traditional felt tents known as gers, as they have for thousands of years. Read more of this post

Is Japan Starting a Sovereign Wealth Fund?

Is Japan Starting a Sovereign Wealth Fund?

Years of currency manipulation by Japan’s Ministry of Finance has left it with $1.27 trillion in foreign exchange reserves, most of which are invested in low-yielding U.S. Treasury bonds. Following an account in Japan’s Nikkei newspaper, Bloomberg News reported that the ministry is planning to outsource management of some of this money. Details about the plan are thin. Still, it could mark the first step toward the creation of a Japanese sovereign wealth fund that invests for profit. Read more of this post

Black Market Radios Even Too Pricey for Portuguese Bemoaning Tax

Black Market Radios Even Too Pricey for Portuguese Bemoaning Tax

Portuguese construction worker Carlos Marques lost his job in 2010 and a year later his unemployment money ran out. So he began peddling everything from old car radios to shoes to scratch a living. “When I first started, business was booming,” Marques, 46, said as he hawked pans, radios and speakers at the Feira da Ladra, or “Thieves Market,” once a medley of sights and smells from Portugal’s colonial history and now the hub of Lisbon’s underground economy. “Now I’m struggling as most of my clients have lost their jobs or spent most of their income on taxes.” Read more of this post

Paris Luxury Property Lures Overseas Rich as French Flee Taxes

Paris Luxury Property Lures Overseas Rich as French Flee Taxes

When a 44 million-euro ($59 million) Parisian townhouse near the Champs-Elysees was snapped up just six weeks after it was put on the block, Charles-Marie Jottras knew the city’s luxury property market was turning around. The chairman of broker Daniel Feau, an affiliate of Christie’s International Real Estate, says the firm found a Qatari buyer for the 19th-century mansion that features a dozen bedrooms on three floors, a terrace with a panoramic view of Paris, a swimming pool and a 1,000 square meter garden. Read more of this post

Record Thai Rice Hoard Expanding Global Supply Glut: Commodities

Record Thai Rice Hoard Expanding Global Supply Glut: Commodities

Rice stockpiles in Thailand, once the world’s biggest exporter, are expanding to a record as a government program to buy production spurs farmers to plant the most crops ever and add to a global glut. Reserves in Thailand will increase 24 percent to 15.5 million metric tons in 2013-2014 as global output rises 1.7 percent to an all-time high of 476.8 million tons, the U.S. Department of Agriculture estimates. The price of 5-percent broken Thai white rice, an Asian benchmark, will drop 12 percent to $390 a ton by April, a five-year low, according to the median of eight trader and analyst estimates compiled by Bloomberg. Read more of this post

Central Banks Gaming Out U.S. Default as Deadline Nears

Central Banks Gaming Out U.S. Default as Deadline Nears

Central banks have begun making contingency plans on how they would keep financial markets working if the U.S. defaults on the world’s benchmark debt. Policy makers discussed possible responses when they met at the International Monetary Fund’s annual meetings in Washington over the weekend, said officials who spoke on condition of anonymity because the talks were confidential. The discussions continued as policy makers headed home. Read more of this post

De Beers Squeezes Diamond Buyers Who Flip Gems: Chart of the Day

De Beers Squeezes Diamond Buyers Who Flip Gems: Chart of the Day

De Beers is driving margins on its diamond output higher by squeezing out buyers who sell rough stones instead of polishing them, consulting firm Gemdax says. The CHART OF THE DAY shows how the biggest diamond company has offered buyers a narrower discount to secondary cash-market prices in the two years since Chief Executive Officer Philippe Mellier was appointed, according to data compiled by Gemdax. The difference shrank to an average 1.1 percent from 5.5 percent. De Beers traditionally sells stones at a discount to so-called sightholders, who cut and polish gems before selling them on. Read more of this post

Uneasy Investors Sell Billions in Treasurys; Nervousness Over U.S. Debt Has Investors Unloading U.S. Bonds

Uneasy Investors Sell Billions in Treasurys

Nervousness Over U.S. Debt Has Investors Unloading U.S. Bonds

MIN ZENG

Oct. 14, 2013 8:30 p.m. ET

While leaders in Washington have been chasing a deal to avert a U.S. default, investors and banks have dumped billions of dollars in government debt. In the past two weeks, investors have sold mountains of short-term debt issued by the government. Banks have also reduced their holdings, trimming such debt by more than 50% over that period, according to data from the Federal Reserve Bank of New York. Amid anxiety about near-term finances, yields on U.S. debt that comes due in one month have risen to levels higher than for similar securities that don’t mature for six months. Typically, issuers pay more to borrow for longer periods of time. Read more of this post

Japanese Stocks Lure More Long-Term Investors

Japanese Stocks Lure More Long-Term Investors

Buying by Mutual Funds Suggests Nikkei May Have More Upside

KANA INAGAKI

Updated Oct. 14, 2013 9:46 p.m. ET

TOKYO—At the start of the year, high-profile hedge funds were piling into Japan’s stock market in search of quick, profitable bets. Now, there are growing signs that mutual funds are jumping in for the long haul. Institutional money managers, which tend to trade less actively than hedge funds, started to ramp up purchases of Japanese stocks in midsummer, after a decisive parliamentary election in July bolstered hopes that Prime Minister Shinzo Abe would be able stay in power long enough to carry out difficult structural changes to the economy, many market experts say. Read more of this post

Treasury Bill Supply at Eisenhower-Era Low Seen Bolstering Bonds

Treasury Bill Supply at Eisenhower-Era Low Seen Bolstering Bonds

Lost amid concern that the U.S. is headed toward a default is a fact that bulls say may help underpin American debt prices: supply of the shortest-term securities is shrinking. Treasury bills make up 13.2 percent of the $11.6 trillion in marketable debt outstanding, the smallest share since Dwight Eisenhower was president in the 1950s and down from 34.4 percent in 2008, according to Barclays Plc. The drop reflects efforts by the government to take advantage of record-low interest rates by selling more longer-term debt after the financial crisis, pushing the average maturity of the Treasury’s debt to 5.4 years from 4.1 years in early 2009. Read more of this post

U.S. debt ceiling crisis would start quiet, go downhill fast

U.S. debt ceiling crisis would start quiet, go downhill fast

Mon, Oct 14 2013

By Jason Lange

WASHINGTON (Reuters) – If Washington doesn’t reach a deal soon to keep paying its bills, an economic crisis could start unfolding so quietly on Thursday it will give little hint of its potential to throw millions of Americans out of work. Many people would not notice right away if the government hits a $16.7 trillion cap on its debt, which could come on Thursday. Checks would likely go out on time that day for everyone from bondholders to workers who are owed unemployment benefits, according to analysts in government and the private sector. Read more of this post

Draghi Had to Expect Calls for New Long-Term Refinancing Operation; The crisis shows that no central bank can easily escape from its unconventional monetary policies

Updated October 14, 2013, 7:45 p.m. ET

Draghi Had to Expect Calls for New Long-Term Refinancing Operation

The crisis shows that no central bank can easily escape from its unconventional monetary policies.

SIMON NIXON

Until recently, the European Central Bank could be forgiven for feeling a little smug. All of the major central banks have massively expanded their balance sheets since the start of the crisis. But while the U.S. Federal Reserve continues to accumulate assets to the tune of $85 billion a month—too nervous about the market’s reaction even to scale down its money-printing—the ECB balance sheet has been steadily shrinking. Read more of this post

Nobel Prize U.S. winner warns of ‘bubbly’ global home prices

Nobel Prize U.S. winner warns of ‘bubbly’ global home prices

Mon, Oct 14 2013

By Alister Bull and Johan Ahlander

WASHINGTON/STOCKHOLM (Reuters) – One of three American economists who won the 2013 economics Nobel prize on Monday for research into market prices and asset bubbles expressed alarm at the rapid rise in global housing prices. Robert Shiller, who shared the 8 million Swedish crown ($1.25 million) prize with fellow laureates Eugene Fama and Lars Peter Hansen, said the U.S. Federal Reserve’s economic stimulus and growing market speculation were creating a “bubbly” property boom. Read more of this post

Philippines infrastructure: taking the slow train to nowhere

Philippines infrastructure: taking the slow train to nowhere

Mon, Oct 14 2013

By Rosemarie Francisco

MANILA (Reuters) – Images of a portion of the Philippines’ oldest light rail transit line ablaze in the middle of the night were exactly what private sector bidders for a $1.4 billion rehabilitation of the country’s rail system had feared. The fire last week, caused by a short circuit that ignited power cables lining the tracks, was the second on Manila’s elevated rail system in two months and one of many mishaps in its 29-year life – telltale signs that Southeast Asia’s first light rail transit (LRT) network is in dire need of an upgrade. Read more of this post

Malaysia’s Securities Commission (SC) rules on updated list of syariah-compliant stocks may impact property stocks due to their relatively higher leverage

Updated: Tuesday October 15, 2013 MYT 9:38:40 AM

New SC rules may hit property, benefit O&G

BY INTAN FARHANA ZAINUL

PETALING JAYA: Certain stocks are expected to face more price volatility than others when the Securities Commission (SC) releases on Nov 29 the updated list of syariah-compliant stocks. Analysts believed that property counters, due to their relatively higher leverage, might take a hit from the more stringent financial rules while others such as plantation as well as oil and gas stocks would have less impact and might even benefit from the move. Read more of this post

China-to-India Price Jump Risks Growth as World Outlook Dims

China-to-India Price Jump Threatens Growth as World Outlook Dims

Higher food costs from China to India are raising prices for a third of the world’s people, adding to the challenge of sustaining the global economic recovery as the growth outlook dims. Consumer prices in China rose 3.1 percent last month as food costs advanced the most since May 2012, statistics bureau figures showed today in Beijing, while India’s Commerce Ministry said inflation unexpectedly accelerated to a seven-month high. Both gauges increased more than economists had estimated. Read more of this post

Huawei Innovates With Rotating CEO System

Oct 14, 2013

Huawei Innovates With Rotating CEO System

JURO OSAWA

China’s Huawei Technologies Co. has a unique management structure that has sometimes raised questions about who makes decisions at the company. At Huawei, three senior executives — Guo Ping, Ken Hu and Eric Xu — take turns and rotate through the chief executive position, with each term for the acting CEO role six months long. The Shenzhen-based company, the world’s second-largest supplier of telecommunications network equipment, adopted the rotating CEO system in 2011. Read more of this post

Asian tycoons look to spin off underperforming businesses

October 14, 2013 9:42 am

Asian tycoons look to spin off underperforming businesses

By Paul J Davies

One is a tall, suave francophone African living in London; the other a small, Octogenarian multi-billionaire from Hong Kong. They look to have little in common, but Tidjane Thiam, who runs UK-based life insurer Prudential, and Li Ka-shing, the patriarch of the Cheung Kong and Hutchison Whampoa empire, are both acting under the influence of the same number – the price to book multiple that answers the question of whether, or not, they should spin off sections of their companies. Read more of this post

15,000 foreclosed properties in Wenzhou pummeling guarantee companies

15,000 foreclosed properties in Wenzhou pummeling guarantee companies

Staff Reporter

2013-10-13

Wenzhou’s banking authorities confirmed rumors of 15,000 houses in Wenzhou nearing foreclosure after surveying 42 financial institutions. It has assured the public that “the situation is under control,” though shaking guarantee companies might not second the opinion, the Shanghai-based Jiefang Daily reports. Wenzhou banks, as of the end of July, reported only 580 cases of foreclosed houses, and 2,584 houses with non-performing loans (NPLs). Of the 580 cases, 183 involved mortgages, and 397 involved mortgages with “collateral plus guarantees,” said the report. Read more of this post

Celebrations costing $300 million to mark the birth date of late Chinese leader Mao Zedong, including mass singing and a noodle feast, have sparked popular anger amid a crackdown by authorities on extravagance

Mass singing honoring Mao in anniversary bash sparks outrage

7:26am EDT

BEIJING (Reuters) – Celebrations costing $300 million to mark the birth date of late Chinese leader Mao Zedong, including mass singing and a noodle feast, have sparked popular anger amid a crackdown by authorities on extravagance. The local government of Mao’s birthplace said on Monday that the events on December 26 marking the 120th anniversary of his birth will include 10,000 people singing a song comparing the revolutionary leader to the rising sun. Another 10,000 will eat “auspicious” birthday noodles at various locations. Read more of this post

Korean fishery industry is sinking fast: Markets, ship owners see no relief in sight as business worsens

Korean fishery industry is sinking fast: Markets, ship owners see no relief in sight as business worsens

BY JEON ICK-JIN, WE SUNG-WOOK [jkkang2@joongang.co.kr]

Oct 14,2013

In a harbor fish market in Jung District, Incheon, lights along the fish stalls were shining to attract customers Friday evening. In contrast to the mood created by the bright lights, there were hardly more than a dozen customers.  “Just a few months ago, we had to keep the stall open well past midnight to accommodate,” says Jung Gyung-suk, a 57-year-old fishmonger who has run a stall for almost three decades. “All day long, I have had only three groups of customers, about 10 people,” said the somber-looking restaurant owner as she shuttered her stall at about 10 p.m.  Read more of this post

Family-controlled conglomerates or chaebol find themselves increasingly under siege for what appears to be their failure to adapt to a new business environment that calls for transparent and law-abiding management

2013-10-13 17:24

Chaebol under siege

Hyosung probe ought to give lessons to other groups 
Family-controlled conglomerates or chaebol find themselves increasingly under siege for what appears to be their failure to adapt to a new business environment that calls for transparent and law-abiding management. The latest victim is Hyosung Group, the nation’s 26th largest conglomerate with more than 11 trillion won in assets. The prosecution banned three sons of group Chairman Cho Suck-rae and other executives from leaving the country on Saturday, following its unannounced raid on the homes and offices of top executives of Hyosung Group a day earlier. The chairman has been prohibited from leaving Korea since July, when the National Tax Service launched a tax investigation into the group. Read more of this post

McDonald’s Japan plagued by convenience stores

McDonald’s Japan plagued by convenience stores

Monday, October 14, 2013 – 09:51

The Japan News/Asia News Network

JAPAN – The sales volume and customer base of McDonald’s Co. (Japan) keep declining despite the introduction of a new president, as the chain loses ground to convenience stores that have been strengthening their sales of coffee and fast food. McDonald’s said Tuesday that sales volume in September, excluding effects from newly opened stores and other factors, was down 3.4 per cent from the figure in the same month last year. While sales declined for the third consecutive month, the number of customers also dropped by 6.5 per cent, a decline for the fifth consecutive month. Read more of this post