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Asia’s Hot-Money Meltdown; Receding capital flows suggest deeper structural flaws in emerging economies.

August 28, 2013, 12:23 p.m. ET

Asia’s Hot-Money Meltdown

Receding capital flows suggest deeper structural flaws in emerging economies.

LIM SAY BOON

Investors are starting to whisper what was unthinkable just a few months ago, that emerging Asia faces another financial crisis. While this remains unlikely, stocks in China, Indonesia, Philippines, and Thailand are already in a bear market that will likely broaden and intensify. The problems are both cyclical and structural, and policy options are limited. The recent stock-market falls and currency routs suggest the coming months will be rough. Singapore’s Straits Times index, Taiwan’s Taiex, Korea’s KOSPI, India’s Sensex and Malaysia’s KLCI have either broken or are breaking below important technical supports, with the likelihood of accelerated losses ahead. There may be corrective rebounds in emerging-market currencies and equities over the coming week or two, but these are likely to be pauses rather than reversals. There are no quick fixes to the savings deficits in the economies worst hit by falling currencies, equities and bond prices. Read more of this post

China SOE Accounting — BAAP Not GAAP Applies

China SOE Accounting — BAAP Not GAAP Applies

2013-08-23 18:16:41

Peter Fuhrman, Chairman and CEO China First Capital

If the last two years of crisis in investing in Chinese companies proves anything, it’s that any Chinese company that pays more tax than it should, documents every transaction and practices the most forensic accounting methods is the one with the calmest, happiest investors. Such companies are very rare among the thousands invested in by private equity, and not very common among publicly-traded ones, if securities regulators in the US and Hong Kong are to be believed. Read more of this post

China Seeks Western-Style Care Amid Explosion of Elderly

China Seeks Western-Style Care Amid Explosion of Elderly

The Chinese increasingly eat, shop and play in ways their Western counterparts would instantly recognize. They’re aging like them too, living longer lives that are often limited by debilitating illnesses. As the almost 200 million population of over-60s more than doubles in the next 40 years, China faces a deluge of infirm elderly who can’t live alone. Nor can they rely on Confucian tradition of children caring for their parents: the country’s one-child policy has left fewer offspring to share the load, while more Chinese are moving away from home to study or work. Read more of this post

Harleys With Joysticks End Century of Bike-Design Inertia; Harley cut the product-development cycle to three years from about five or six. By reducing 11th-hour tinkering, the company accelerated the process and lowered the cost

Harleys With Joysticks End Century of Bike-Design Inertia

Road hogs are getting high-tech.

Harley-Davidson Inc. (HOG)’s newest models feature a voice-activated and touch-screen GPS system, the first on a production motorcycle. When the bike is getting low on fuel, the system finds the nearest filling station and maps out directions on a 6.5-inch (16.5 centimeter) screen the rider can control by voice, touch or joystick.

What’s also new is how the company decided what to include: It asked its customers. For the first time, 110-year-old Harley is using customer focus groups and dealer clinics as it develops models and features. Last week, the first wave of new bikes from those changes began arriving in dealerships. Read more of this post

Cotton Glut Expands to Record as Hanes Profit Gains

Cotton Glut Expands to Record as Hanes Profit Gains: Commodities

The fourth straight year of surplus cotton output and the biggest drop in Chinese imports since 2000 are creating record global inventories, signaling higher profits for the makers of Hanes underwear.

Stockpiles will jump 8.6 percent to 93.765 million bales in the 12 months ending in July, the U.S. Department of Agriculture said in an Aug. 12 report. There are enough inventories to make three pairs of jeans for every person in the world and reserves doubled since reaching a 13-year low in 2010. Prices may fall 8.5 percent to 76.6 cents a pound by the end of 2013, according to the average of 16 analyst estimates compiled by Bloomberg. Read more of this post

E-Cigarettes Just Passed The $1 Billion Sales Mark

E-Cigarettes Just Passed The $1 Billion Sales Mark

ROB WILE AUG. 28, 2013, 1:31 PM 1,369 1

A shop owner, who gave his name as Yohan, uses an electronic cigarette near a poster which reads “electronic cigarette, free trial” in his shop in Nice June 7, 2013. France intends to ban electronic cigarette smoking in public places by imposing the same curbs enforced since 2007 to combat tobacco smoking. E-cigarettes is officially a $1 billion per year business. This is according to Wells Fargo data cited by V2 Cigarettes, a major online electronic cigarette retailer. Sales in brick and mortar stores are now at $700 million annualized, while online transactions are expected to tick at least $500 million.  “When combined with online sales, the industry has now exceeded $1 billion for the first-time ever, with the consumption of e-cigs likely surpassing that of traditional cigarettes in the next decade,” Wells Fargo’s Bonnie Herzog said.  Read more of this post

Rubber farmers in Thailand have blockaded roads and train tracks over the past week to pressure the government to guarantee a rubber price to bolster their incomes, as it has done for rice growers.

August 28, 2013, 11:13 a.m. ET

Thai Rubber Farmers Protest Over Prices

Roads and Rail Blockaded as Demonstrators Want Government Action to Buttress Their Incomes

WARANGKANA CHOMCHUEN

BANGKOK—Rubber farmers in Thailand have blockaded roads and train tracks over the past week to pressure the government to guarantee a rubber price to bolster their incomes, as it has done for rice growers. Hundreds of rubber farmers began gathering last weekend in the Cha-uat district of Nakhon Si Thammarat province, about 480 miles south of Bangkok, complaining the government has neglected the 60% drop in rubber prices since a record high in February 2011. Read more of this post

The Park Geun-hye government is backpedaling on her much-touted hard-line stance against large conglomerates as it appears that her administration will ease regulations in their favor

2013-08-28 18:11

Park backpedals on chaebol policy

By Choi Kyong-ae
The Park Geun-hye government is backpedaling on her much-touted hard-line stance against large conglomerates as it appears that her administration will ease regulations in their favor, political analysts said Wednesday. “President Park is definitely backpedaling on her trademark policy of ‘economic democratization’ after she called in chaebol leaders (to Cheong Wa Dae) to ask them to make investments to stimulate the economy,” Lee Phil-sang, invited professor of the department of economics at Seoul National University, said in a telephone interview with The Korea Times. Read more of this post

Among Korean companies, Lotte Chemical is the most vulnerable to the economic turmoil in emerging Asian markets; Lotte Chemical acquired Malaysia’s petrochemical company Titan Chemicals in 2010

2013-08-28 17:38

Lotte Chemical exposed to Asian turmoil

By Kim Rahn
Among Korean companies, Lotte Chemical is the most vulnerable to the economic turmoil in emerging Asian markets, according to market data, Wednesday.
Petrochemical or energy-related companies are generally more exposed to market fluctuations in India, Indonesia and other neighboring Asian countries, as their sales in the countries take up larger portions of their total sales than firms in other industries. Read more of this post

Paying the Price for a Slack Civil Service in Indonesia; Experts say the high price of seeking public office fuels corruption and inefficiency among bureaucrats

Paying the Price for a Slack Civil Service

Experts say the high price of seeking public office fuels corruption and inefficiency among bureaucrats

By Yuli Krisna, Novy Lumanauw & Robertus Wardi on 8:18 am August 29, 2013.
Sumedang, West Java/Jakarta. Need a land or birth certificate? Or a driver’s license or car registration? Or a place at a public school or medication at a public hospital? You’ll stand little chance of success without paying a bribe or procuring the services of an intermediary, such as is the state of the Indonesian civil service. “It’s a fact of life here in Indonesia. The civil servants are actually trying to make things difficult so that people give them money to get things done. In many cases, civil servants work together with middlemen and get a cut,” Dadang Trisasongko, a representative of integrity activist group Transparency International Indonesia, told a forum in Jakarta on Monday. Read more of this post

Foreign workers in Indonesia must comply with local regulations and follow cultural norms based on Pancasila, the philosophical foundation of the Indonesian state

Pancasila Plan to Affect Foreigners

By Edi Hardum on 8:35 am August 29, 2013.

Students visit the Pancasila Monument in East Jakarta on April 3, 2013. Foreign workers in Indonesia must comply with local regulations and follow cultural norms based on Pancasila, the philosophical foundation of the Indonesian state, Irianto Simbolon, the director general in charge of industrial relations and workers’ social security at the Manpower and Transmigration Ministry, said on Wednesday. (JG Photo/Safir Makki)

Foreign workers in Indonesia must comply with local regulations and follow cultural norms based on Pancasila, the philosophical foundation of the Indonesian state, a government official said on Wednesday. Irianto Simbolon, the director general in charge of industrial relations and workers’ social security at the Manpower and Transmigration Ministry said the department was rolling out socialization training necessary to help foreigners adapt to Indonesia and to prevent intercultural conflict that could hurt foreign investment. Read more of this post

A team of officials from several government agencies are teaming up to bring back to Indonesia fugitives involved in the Bank Century bailout corruption case who fled overseas

Bank Century Extraditions Loom

By Markus Junianto Sihaloho on 8:28 am August 29, 2013.
A team of officials from several government agencies are teaming up to bring back to Indonesia fugitives involved in the Bank Century bailout corruption case who fled oversees. Attorney General Basrief Arief said his office was extraditing two former Bank Century bosses: Hesham Al Warraq, who is now living in Saudi Arabia, and Rafat Ali Rizvi, who is in the United Kingdom. Basrief said the extraction effort was being facilitated by a team led by the Coordinating Ministry for Legal, Political and Security Affairs that also included the Attorney General’s Office, Ministry of Foreign Affairs, National Police and Financial Transaction Reports and Analysis Center (PPATK). Read more of this post

Skidding Rupee Endangers India’s Slowing Economy; Indian Currency’s Fresh Lows Fuel Inflation, Threaten Public Finances

August 28, 2013, 2:30 p.m. ET

Skidding Rupee Endangers India’s Slowing Economy

Indian Currency’s Fresh Lows Fuel Inflation, Threaten Public Finances

BIMAN MUKHERJI, SUDEEP JAIN and SAPTARISHI DUTTA

NEW DELHI—India’s currency experienced its worst one-day drop in years Wednesday, skidding to a new low more than 8% below where it started the week and sharply ratcheting up pressure on the country’s already fragile economy. Currencies in other emerging markets—from South Africa and Turkey to Indonesia and Malaysia—also have been battered amid a general pullback by investors betting that the U.S. Federal Reserve’s easy-money stance is ending. But India, the world’s second-most populous country and Asia’s third-biggest economy, has been among the most vulnerable to this summer’s shift in sentiment because of its reliance on foreign money to fund its wide trade deficit. Read more of this post