Bamboo Innovator

US debt drama haunts ‘risk free’ assets

October 18, 2013 4:56 pm

US debt drama haunts ‘risk free’ assets

By Ralph Atkins in London

The world has this week admitted the possibility of two things previously thought impossible. First, yetis could exist: the mythical mountain beast might be a polar bear hybrid, according to a British scientist. Second, the US could default on its debt. While Washington prevented the October 17 US debt ceiling deadline leading to catastrophic payment glitches, the uncertainty caused by the political showdown has raised fears about the country’s growth prospects and its global economic influence. Read more of this post

Soaring cost of US share dealing risks ‘investor harm’

October 17, 2013 8:14 pm

Soaring cost of US share dealing risks ‘investor harm’

By Arash Massoudi in New York

The costs of keeping up with the complexity of the US equity market may be harming individual savers, says an executive from one of the world’s largest institutional investing firms. William Baxter, head of global programme trading and market structure at Fidelity, said the costs incurred by buyside firms to stay competitive with technological advances in stock trading on the US market continue to soar, even as trading volumes have fallen sharply in recent years. Read more of this post

Why this $80bn fund manager won’t touch Australian banks

Why this $80bn fund manager won’t touch Australian banks

PUBLISHED: 11 HOURS 58 MINUTES AGO | UPDATE: 9 HOURS 38 MINUTES AGO

Won’t invest in Australian banks … Matthew McLennan with his wife Monika in New York City. Photo: Trevor Collens

CHRISTOPHER JOYE

Australia’s biggest international fund manager believes Treasurer Joe Hockey should be taking the possibility of a housing bubble more seriously and worries money-printing by central banks is creating asset bubbles. Matthew McLennan, who manages $80 billion of assets in New York for First Eagle Investment Management, revealed to AFR Weekend he won’t invest in Australian banks because they are too risky and is concerned about the levels of private sector debt in Australia. Read more of this post

The Life of China’s Communist Party; A campaign for communist discipline confronts a generation focused on personal fulfillment

The Life of China’s Communist Party

A campaign for communist discipline confronts a generation focused on personal fulfillment

ROWAN CALLICK

Oct. 18, 2013 8:57 p.m. ET

The scene evokes memories of a more certain and compliant era. Xi Jinping, the General Secretary of the world’s most powerful organization, sits with his arms folded, leaning watchfully on a conference table at which members of the committee of the communist party in China’s Hebei province are writing “self-criticisms.” Mr. Xi, the party’s chief and the nation’s president (the latter being the lesser role), has been touring the country, ensuring that party members everywhere bow their heads in the face of the Maoist “mass line” campaign he is directing. This will restore discipline to the party, Mr. Xi believes, and regain the respect of ordinary folk who have become skeptical in the face of corruption, a soaring wealth gap and an aristocratic attitude among officials. Read more of this post

Are You Prepared for the Next Crash? Saturday marks 26 years that the market suffered its worst one-day crash ever. Another crash of that magnitude is inevitable

Are You Prepared for the Next Crash?

Saturday marks 26 years that the market suffered its worst one-day crash ever. Another crash of that magnitude is inevitable.

MARK HULBERT

Updated Oct. 18, 2013 6:47 p.m. ET

On this 26th anniversary of the 1987 stock-market crash, the worst one-day drop in U.S. history, it’s worth asking whether such an event could happen again. According to a number of researchers, the answer is yes. And that is a sobering thought indeed, since the Dow Jones Industrial Average fell 22.6% on Oct. 19, 1987. An equivalent drop today would take more than 3,400 points off the Dow in a single session. Read more of this post

As stock splits wane, more may follow Google to $1,000

As stock splits wane, more may follow Google to $1,000

4:17pm EDT

By Julia Edwards

NEW YORK (Reuters) – With its surge on Friday, Google Inc became the latest member, though not likely the last, of a tiny fraternity of companies that boast $1,000 share prices. In a market where stock splits have become rarer, there may be more of this to come than just the two stocks with four-digit stock prices in the Standard & Poor’s 500 index – Google and Priceline.com, which hit $1,000 earlier this year. Historically, once share prices got too high – even around $125 a share – companies split shares to make them more accessible to Main Street investors. But splits have become few and far between, and big numbers are more the norm for familiar names like Apple Inc, Chipotle Mexican Grill Inc, Netflix Inc and Visa Inc. Stock splits peaked in 1986 and 1987, when there were 114 and 111 splits, respectively, and they surged again in the go-go days of the dot-com bubble, with 102 splits in 1997, back when retail investors hungrily chased the tech boom, according to S&P Dow Jones Indices. Read more of this post

China’s Corruption Drive Shifts Gears

October 18, 2013, 8:05 PM

China’s Corruption Drive Shifts Gears

By Russell Leigh Moses

The detention of Nanjing Mayor Ji Jianye earlier this week might seem like just the latest move in Chinese leader Xi Jinping’s drive clean up the Communist Party ranks by going after both “tigers” and “flies.” In fact, the Nanjing case marks a departure from Beijing’s usual method of coping with corruption by Party members, in a number of important ways. Typically, announcements of an investigation and confinement of a high-ranking cadre that appear in the state-controlled press are terse and uninformative. That’s how the Nanjing media covered the event (in Chinese). Read more of this post

China’s Growth Trajectory Depends on Political Calibrations

China’s Growth Trajectory Depends on Political Calibrations

Xi’s Plans to Shift From Growth-at-Any-Cost Strategy as Big a Factor as Economic Conditions

BOB DAVIS

Oct. 18, 2013 1:01 p.m. ET

China’s growth accelerated, with gross domestic product growing 7.8% in the third quarter from a year earlier. But Louis Kuijs of Royal Bank of Scotland tells Deborah Kan why it will be difficult for the country’s economy to keep up the pace of growth during the fourth quarter.

BEIJING—Chinese President Xi Jinping‘s plans to shift the economy away from a growth-at-any-cost strategy means that China’s GDP rise over the coming year will depend as much on political decisions as on economic conditions at home and abroad. After China said Friday that its third quarter GDP growth accelerated to 7.8%, year over year, from 7.5% in the prior quarter, Chinese officials said the country would have trouble sustaining the faster pace. Read more of this post

Foreign investors are stampeding into South Korea, snapping up stocks in the longest buying spree on record

Foreign Investors Pile Into South Korea

Foreign investors are stampeding into South Korea, snapping up stocks in the longest buying spree on record.

KANGA KONG and DANIEL INMAN

Updated Oct. 18, 2013 7:06 a.m. ET

Foreign investors are stampeding into South Korea, buying up stocks for 36 straight trading days to mark the longest buying spree on record as cheap equities and the nation’sstrong finances attract buyers. Since the start of the second half there’s been $13.1 billion of inflows, more than reversing the $9.4 billion that was yanked out in the first six months of the year. The cash has fuelled a 16% rally in stocks since the end of June to touch this year’s high on Friday, while the currency has also advanced. Much of the allure lies with the country’s solid economy, recording trade surpluses for 19 months that both analysts and investors say bodes well for future economic growth. Unlike previous buying from overseas that has usually centered just on a handful of Korea’s largest companies like Samsung Electronics005930.SE +0.62% and Hyundai Motor,005380.SE -3.02% this time investors are also venturing into smaller and lesser known firms. Read more of this post

Families With Kids Go Homeless as U.S. Rents Exceed Pay: Economy

Families With Kids Go Homeless as U.S. Rents Exceed Pay: Economy

When Montoria Freeland separated from her husband of 15 years in 2008, she left a four-bedroom house and economic security. Before long, her pay and hours as a pharmacy technician were cut and she found herself and her son facing homelessness. Freeland lived with family for a time, she said, and four months ago moved into transitional housing funded by the city government in Washington, D.C., while searching for work that pays more than her $8.25-an-hour retail job. Having lost her oldest son in a 2000 homicide, Freeland said she insists on looking for housing in a safe neighborhood for her surviving one, now 17. She found that’s available only at an increasingly steep price. Read more of this post

China warns of slowing demand after the latest trade data showed sales to South-East Asia slowed sharply in September

Updated: Friday October 18, 2013 MYT 8:45:33 AM

China warns of slowing demand

BEIJING: China’s exporters face a difficult time in coming months as demand from emerging markets slows, the Chinese trade ministry warned after the latest trade data showed sales to South-East Asia slowed sharply in September. But China is ready to take measures to support its exporters to ensure the trade sector grows 8% this year as targeted, Commerce Ministry spokesman Shen Danyang said, allowing exporters to see “mild growth” in the next few months. Read more of this post

Elite French winemakers seek elusive Chinese blend to get China market

Updated: Friday October 18, 2013 MYT 1:19:50 PM

Elite French winemakers seek elusive Chinese blend to get China market

PENGLAI, China: The world’s fine winemakers have exacting standards for soil, climate and cultivation to produce the perfect grape. And they are looking to recreate that unlikely blend in China – better known for cheap mass production. The potential harvest will be more drinkers in the world’s most populous country, where wine consumption more than doubled in the four years to 2011 and is set to rise another 40 percent by 2016, according to the industry’s top trade-fair organiser Vinexpo. Read more of this post

Nissan’s failed ‘Taxi of Tomorrow’

Nissan’s failed ‘Taxi of Tomorrow’

By Alex Taylor III, senior editor-at-large  @FortuneMagazine October 18, 2013: 8:50 AM ET

Nissan’s Taxi of Tomorrow is soon to be yesterday’s news in New York.

Hail a yellow cab in New York City today, and you could be stepping into a dog’s breakfast of vehicles, ranging from a cavernous Toyota (TM) Sienna minivan to a claustrophobic Ford Escape crossover. After climbing into the rear seat, you may find yourself nostalgic for a yellow Crown Victoria, an obsolete sedan that had been in production for 20 years when Ford (F, Fortune 500) discontinued it in 2011. But chances are you won’t be sliding your fanny into very many Nissan NV200s, the one-time “taxi of tomorrow” that now has only a slim chance of becoming a taxi of today.

The Nissan cab, which was supposed to replace nearly all of the 16 different models currently certified as New York City taxi-worthy, found itself detoured by a combination of technical shortcomings, city hall bumbling, and plain old political hardball. For Nissan, the failure of the NV200 to take over the entire fleet represents a financial loss of $50 million, a missed marketing opportunity, and a very public embarrassment. Read more of this post

Li Ka-Shing Companies to Sell Shanghai’s Lujiazui Financial District Project for $1.16B

Li Ka-Shing Companies to Sell Lujiazui Project for $1.16B

Billionaire Li Ka-shing’s Hutchison Whampoa Ltd. and Cheung Kong Holdings Ltd. (1) will sell a project in Shanghai’s Lujiazui financial district to buyers including China Everbright Ltd. for $1.16 billion. The companies will each sell a 50 percent stake in Extreme Selection, the owner of the company developing the project at Lujiazui Ring Road, Hutchison said in a statement to Hong Kong’s exchange. HYZL Development Co. and HYZL Investment Co. will each buy 47 percent, while Diamond Gate Group Ltd., a China Everbright Ltd. (165) subsidiary, will take the remaining 6 percent, according to an Everbright statement today. Hutchison and Cheung Kong announced in October 2006 that they would spend 1.74 billion yuan ($285 million) to develop real estate in Lujiazui. Some 64 overseas companies had their regional headquarters in the 31.8 square-kilometer district, according to a government website for the area. The Oriental Morning Post reported in August that Cheung Kong planned to sell the Oriental Financial Center office building, the only property with a Lujiazui address listed in the company’s annual report.

To contact the reporter on this story: Eleni Himaras in Hong Kong at ehimaras@bloomberg.net

Hutchison Stops Shopping ParknShop; Li Ka-Shing’s Conglomerate Had Hoped to Reap As Much as $4 Billion for the Supermarket Chain

Hutchison Stops Shopping ParknShop

Li Ka-Shing’s Conglomerate Had Hoped to Reap As Much as $4 Billion for the Supermarket Chain

PRUDENCE HO

Oct. 18, 2013 10:29 a.m. ET

HONG KONG— Hutchison Whampoa Ltd. 0013.HK +0.78% , controlled by Asian’s richest man, Li Ka-shing, has decided not to sell its ParknShop supermarket chain, after concluding the private sale at this time wouldn’t deliver maximum value to shareholders. The conglomerate also said Friday that it is considering expanding a strategic review of retail arm A.S. Watson & Co.—which includes ParknShop—to include possible public offerings of all or part of the business, though it wouldn’t relinquish any control. Read more of this post

Transparency becoming major issue for global oil market, says expert, with concerns that prices are subject to manipulation

Updated: Thursday October 17, 2013 MYT 3:38:35 PM

Transparency becoming major issue for global market, says expert

SINGAPORE: Political and public interest in oil markets remains high with concerns that prices are subject to manipulation, delegates at the World Energy Congress were told Thursday.  The concern comes even though recent academic studies suggest that oil prices are driven primarily by the fundamentals of supply and demand. A panel of industry experts at the congress held in Daegu, South Korea on Tuesday noted that shifts in global and regional oil markets, trading of oil futures in emerging financial markets such as Dubai and Shanghai, growing Russian energy exports to Asia and booming US shale oil production could have a significant impact on price discovery. Read more of this post

Europe’s bold vision hits trouble

Europe’s bold vision hits trouble

7:53am EDT

By Luke Baker and Paul Carrel

BRUSSELS/FRANKFURT (Reuters) – Barely a year after European leaders set out an ambitious vision for the euro zone’s future, progress has all but stalled and pressure is building for what may amount to a ‘make or break’ moment for the union. The idea of a roadmap setting out steps towards the deeper integration of the euro zone came about in early 2012, when the debt crisis was at its peak and there were legitimate fears that Greece could be forced out of the currency union, or that the whole European project could disintegrate. Read more of this post