Bamboo Innovator

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

Are Stocks Ahead of Themselves? In his latest quarterly commentary, Wally Weitz writes that his fund shop holds “substantial cash reserves” because stocks aren’t cheap

MONDAY, OCTOBER 21, 2013

Are Stocks Ahead of Themselves?

By WALLY WEITZ AND BRAD HINTON | MORE ARTICLES BY AUTHOR

In his latest quarterly commentary, Wally Weitz writes that his fund shop holds “substantial cash reserves” because stocks aren’t cheap.

(Editor’s Note: Weitz is president and founder of Weitz Funds and Hinton is the firm’s director of research. A longer version of this commentary, which includes the latest quarterly performance figures for Weitz Funds, is available on the company Website.)

Bonds, as we have discussed in recent letters, have probably come to the end of their 30-year bull market. Their yields are artificially depressed (and prices artificially inflated) by Federal Reserve actions. This leaves bond investors in an awkward position. We do not know when interest rates will rise, but absent a serious recession, they will. When this happens, holders of long-term bonds will be “locked into” current low interest rates and will experience poor returns. Read more of this post

Europe Breakup Forces Mount as Union Relevance Fades

Europe Breakup Forces Mount as Union Relevance Fades

Thomas Bellinck, a Belgian theater director, has put a date on the European Union’s collapse: 2018.

The doomsday timeline of his Brussels exhibition called “Life in the Former EU: Final Years of the Long Peace,” presented the bloc’s six-decade run as a peaceful interregnum before the continent’s relapse into nationalism, an interlude where technocrats were too focused on regulating the diameter of tomatoes as their experiment in multinational democracy withered. Read more of this post

Survivor of 150 Years of Turmoil Faces Being Buried by Abenomics; “The cost of wages will go up while Abenomics will raise the price of everything, adding to our costs. We will be buried without a new source of revenue.”

Survivor of 150 Years of Turmoil Faces Being Buried by Abenomics

When Shigeo Aiba is worried about the survival of his company, it’s time to pay attention. Aiba is president of Togo Seisakusyo Corp., a Japanese maker of industrial springs that traces its roots back more than 150 years to when Jyouuemon Aiba began repairing farm equipment among the rice fields of Chita peninsula 270 kilometers (170 miles) southwest of Tokyo. The business, which survived the effects of the Great Kanto Earthquake, defeat in World War II, destruction by a typhoon and the collapse of the asset bubble in the 1980s, is now struggling to survive Abenomics. Read more of this post

Gold-plated buildings a growing trend in China

Gold-plated buildings a growing trend in China

Monday, October 21, 2013 – 15:04

AsiaOne

CHINA – The new headquarters of People’s Daily, with its freshly gold-plated facade, highlights an increasing number of gilded buildings in China over the past decade. China’s rapid development and booming economy have lent a touch of glitz to various buildings in cities such as Beijing, Kunming, Jiangsu and Shenzhen, which range from office buildings, airports, hotels and tourist landmarks. These buildings with gleaming exteriors have captured the attention of many passers-by and sparked much discussion among both locals and foreigners. Despite their golden appearance, these buildings are actually clad in brass and dyed anodized aluminium. However, many people are still unimpressed by the ostentatious displays of wealth.

China to restrict satellite TV stations to one foreign program

China to restrict satellite TV stations to one foreign program

Sun, Oct 20 2013

SHANGHAI (Reuters) – China will allow satellite television stations to buy the right to broadcast only one foreign program each year from 2014 as part of new restrictions to push “morality-building” and educational shows, state media reported on Monday. The official Shanghai Securities Journal, citing an order by the General Administration for Press and Publication to domestic television stations, also said foreign programs could not be broadcast in prime-time viewing hours from 7:30 p.m. to 10 p.m. during the year in which the broadcasting rights were purchased. Read more of this post

Luxury Rents Fall in Hong Kong on Expatriate Budget Cuts

Luxury Rents Fall in Hong Kong on Expatriate Budget Cuts

Luxury-home rents in Hong Kong and Singapore, two of Asia’s most expensive cities for apartment leases, are declining for a third year as banks squeezed by slowing growth cut budgets for expatriate workers. Rents for Hong Kong homes that broker Jones Lang LaSalle Inc. categorizes as luxury fell about 1.1 percent in the first half of 2013, bringing their losses to about 13 percent since peaking in October 2011. The average monthly rent of Singapore condominiums that charge at least S$12,000 ($9,670) a month slid 0.2 percent to S$4.86 per square foot in the three months ended June, the lowest since the December 2009 quarter, London-based broker Savills Plc said. Read more of this post

Smog Puts Focus on Air Outside Beijing

October 21, 2013, 6:23 PM

Smog Puts Focus on Air Outside Beijing

A woman wearing a mask checks her mobile phone on the square in front of Harbin’s landmark San Sophia church, in China’s Heilongjiang province on Oct. 21. Although Beijing’s air pollution has somewhat abated since earlier this month, parts of northern China on Monday were covered in thick smog, forcing the closure of some schools, airports and highways in the region.

Read more of this post

Draghi challenged rules that would bar banks from accessing public aid unless they forced losses on junior bondholders, a central building block of European Union protocols for handling struggling banks

Draghi Challenges EU Bank-Aid Rules Over Forced Losses

European Central Bank President Mario Draghi challenged rules that would bar banks from accessing public aid unless they forced losses on junior bondholders, a central building block of European Union protocols for handling struggling banks. In a letter to EU Competition Commissioner Joaquin Almunia, Draghi said EU rules need to be clarified so regulators can order technically solvent banks to strengthen their balance sheets without scaring off investors. Draghi said public capital needs to be available — without wiping out subordinated debt holders or forcing them to convert to equity — if a bank’s holdings are above regulatory minimums and also below what supervisors deem necessary in a particular case. Read more of this post

Shale Overload to Spur U.S.-China Fuel Trade: Energy Markets

Shale Overload to Spur U.S.-China Fuel Trade: Energy Markets

U.S. exports of natural gas liquids, already at a record amid surging output from shale deposits, are poised to quadruple by 2020 as the expansion of the Panama Canal cuts shipping costs to Asia. Deliveries of the fuels to foreign buyers averaged 555,000 barrels a day in July, the most in U.S. government data going back to 1981. China’s imports of propane, butane and isobutane, with uses as varied as home heating, chemical manufacturing and refrigeration, jumped 23 percent in August from a year earlier, customs data show. Read more of this post

Not much of a festival season for Indians as gold runs dry

Not much of a festival season for Indians as gold runs dry

5:09pm EDT

By Siddesh Mayenkar

MUMBAI (Reuters) – In India’s biggest bullion market, Mumbai’s Zaveri Bazaar, gold dealers are busy — not filling orders for customers, but busy avoiding phone calls because they don’t have any gold to sell. Battling a huge trade deficit and a weak currency, the government has taken various steps this year to make it harder and more expensive for Indians to get hold of gold, the biggest item on the country’s import bill after oil. Read more of this post

Myanmar’s aviation industry booms despite grim safety record

Myanmar’s aviation industry booms despite grim safety record

5:22pm EDT

By Aubrey Belford and Min Zayar Oo

KONEMOE, Myanmar (Reuters) – Htay Aung was riding pillion on a motorbike last Christmas morning, wending through the cool hills of eastern Myanmar, when Air Bagan Flight 11 came down on top of him. The Fokker 100 – more than 24 tonnes of aircraft, plus 65 passengers and six crew – sheared its way through trees and powerlines, across the road and into a field short of nearby Heho airport. Htay Aung found himself sucked into a scorching maelstrom of debris. Read more of this post

Buffett’s Berkshire cuts Tesco stake by one-fifth -filing

Buffett’s Berkshire cuts Tesco stake by one-fifth -filing

6:15pm EDT

(Reuters) – Billionaire Warren Buffett’s Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research, Stock Buzz) last week slashed its stake in the world’s No.3 retailer, Tesco Plc (TSCO.L: Quote, Profile, Research, Stock Buzz), by about one-fifth, or 300 million pounds ($484.75 million), according to a stock market filing on Monday. The move came two weeks after Tesco posted a decline in its first-half profit as earnings from mainland Europe tumbled 68 percent, and the grocer struggled to regain market share in its main British market. Tesco has been losing market share to rivals that include Wal-Mart Stores Inc’s (WMT.N: Quote, Profile, Research, Stock Buzz) Asda and J Sainsbury Plc (SBRY.L: Quote, Profile, Research, Stock Buzz), which this month reported a 2 percent rise in second-quarter sales. Read more of this post

Legoland Operator Merlin Entertainments Plans IPO in London; owners are seeking an enterprise value, or the sum of Merlin’s equity and net debt of 1.3 billion pounds, of about 4 billion pounds

Legoland Operator Merlin Entertainments Plans IPO in London

Merlin Entertainments Group Ltd., the private-equity backed owner of Madame Tussauds and the London Eye, plans to raise 200 million pounds ($324 million) selling shares in a London initial public offering. Blackstone Group LP (BX), CVC Capital Partners Ltd. and Lego Group owner Kirkbi A/S are expected to sell part of their stakes in the offering, the company said today in a statement. The owners are seeking an enterprise value, or the sum of Merlin’s equity and net debt, of about 4 billion pounds, according to two people familiar with the matter, who asked not to be identified because the sale has yet to be completed. A London-based company representative declined to comment on the valuation. Read more of this post

Oil Patch Activism to Spur 2014 Dealmaking and Shakeups

Oil Patch Activism to Spur 2014 Dealmaking and Shakeups

Activist investors may spur a return to dealmaking in the energy industry as shareholders seek to reap greater value from oil and natural gas reserves. A new round of boardroom shakeups in the oil patch should force additional restructuring and asset sales in the next year, William D. Anderson Jr., a Goldman Sachs Group Inc. (GS) banker, said at the Bloomberg Link Oil & Gas Conference in Houston yesterday. Corporate takeovers may be less likely. Read more of this post

KKR to Goldman Skirmish for 3% Scraps as $48 Billion LBO Bankruptcy Looms

KKR to Goldman Joined in Scraps Skirmish as LBO Bankruptcy Looms

KKR & Co., Goldman Sachs Capital Partners and TPG Capital, the firms that led the $48 billion buyout of Energy Future Holdings Corp. in 2007, are fighting to receive barely 3 percent of their initial investment when the power generator files for bankruptcy as soon as this month. Negotiations with senior creditors including Leon Black’s Apollo Global Management LLC (APO) and Centerbridge Capital Partners LLC, which are poised to seize control of the former TXU Corp., are at a crucial juncture today when agreements that allow them to view nonpublic information to foster talks expire. A proposal disclosed last week that wasn’t accepted would have given the company’s owners as little as $270 million. Read more of this post