Bamboo Innovator

Financial advisers who put their clients into Australian LM’s frozen funds stand to collect millions in commission before their clients see any return

LM frozen funds: commissions before client earnings

July 30, 2013 – 12:24PM

Michael West

The financial advisers who put their clients into LM Investment Management’s frozen funds stand to collect millions in commission before their clients see any return. The latest administrators report for LM Investment Management shows commissions of $10 million are subject to claims by financial advisers. However, the actual investors themselves have not been deemed by the LM group administrators to be creditors. Rather, their savings rank behind the fees of the very people who put them into these dud investments in the first place. Business Day revealed yesterday LM founder Peter Drake had taken at least $46 million in loans before his mortgage fund empire collapsed earlier this year. These have not been repaid and Drake appears headed for bankruptcy. In light of the loans to Drake and the feeding frenzy by the administrators and their lawyers, the prospective returns for investors in the LM suite of funds is diminishing with every week that passes. Since the collapse in March this year, the administrators FTI Consulting have charged $2.4 million in fees, or $130,000 a week. Disbursements came to another $2 million. Read more of this post

China: Citizens united; Civil activists pose a growing threat to the Communist party as they link up

July 29, 2013 5:36 pm

China: Citizens united

By Kathrin Hille

Civil activists pose a growing threat to the Communist party as they link up, writes Kathrin Hille

When the Chinese police arrested rights lawyer Xu Zhiyong on July 16, they charged him with “gathering a crowd to disturb order in a public place”.

As Mr Xu had been under house arrest since April, the charge triggered an outcry. But in the eyes of China’s ruling Communist party, the softly spoken but stubborn lawyer is still a threat, even while confined to his Beijing home. Over the past year, Mr Xu has worked to link activists who were each running individual campaigns, marshalling them into a broader movement called “citizenry” to foster a sense of rights and responsibilities across a range of public issues. It is the virtual equivalent of a crowd in the street. Read more of this post

How India has Punctured its Gas Balloon; Even as gas takes off in the US as a cleaner and cheaper fuel, India is heading in the opposite direction with policy flip-flops and failed promises strewn along the way

How India has Punctured its Gas Balloon

by Cuckoo Paul | Jul 30, 2013

Even as gas takes off in the US as a cleaner and cheaper fuel, India is heading in the opposite direction with policy flip-flops and failed promises strewn along the way

From his office in central London, Christof Ruhl, chief economist and vice president at British Petroleum (BP), analyses energy demand-supply data from around the world to produce one of the most widely consumed reports of the oil industry: BP’s statistical review of world energy. This year, Ruhl says, he was amazed by the unprecedented shifts in energy preference in countries the world over. Read more of this post

World’s post offices look to reinvent selves

World’s post offices look to reinvent selves

AFP-JIJI

JUL 29, 2013

PARIS – There was a time when your local post office would mainly sell stamps and deliver letters. No longer. To counteract the turmoil brought on by email and text messages, postal services worldwide have reinvented themselves, taking on the technological revolution that once looked to cripple them. Traditional mail service has dropped sharply in recent years, though emerging countries are a notable exception. According to the Universal Postal Union, global letter and light parcel delivery dropped 3.7 percent in 2011 from a year earlier, and by 5.1 percent when just counting Europe and the former Soviet Union. Read more of this post

Essilor, the world’s biggest producer of eyeglass lenses by sales is buying a 51 per cent stake in Transitions Optical from partner PPG Industries for $1.73bn

July 29, 2013 4:39 pm

Essilor buys majority stake in Transitions Optical for $1.73bn

By Adam Thomson in Paris

Essilor International, the world’s biggest producer of eyeglass lenses by sales is buying a 51 per cent stake in Transitions Optical from partner PPG Industries for $1.73bn.

The acquisition will hand Essilor full ownership of Transitions Optical, the inventor of plastic lenses that darken in ultraviolet light, and increase the French company’s exposure to a segment that is growing twice as fast as the overall optics industry. Read more of this post

BMW Launches Its First Mass-Production Electric Car

Updated July 29, 2013, 10:18 p.m. ET

BMW Launches Its First Mass-Production Electric Car

Auto Maker Needs to Boost Sales of Electric Cars to Meet Regulatory Requirements

JOSEPH B. WHITE

BMW unveiled Monday its first mass-production electric car, the i3. The German car maker says the car can accelerate from 0-60 miles an hour in just over seven seconds and says the basic model has a range of 100 miles. The new i3 is expected to be priced at $41,350 before incentives.

BMW AG BMW.XE -0.26% Chief Executive Norbert Reithofer unveiled on Monday the auto maker’s first mass-production electric car, saying his company would need to boost sales of plug-in and battery electric vehicles dramatically by 2025 to meet regulatory requirements. The BMW i3 is expected to go on sale in the U.S. in the second quarter of 2014 where it is expected to be priced at $41,350 before federal tax and other incentives. An optional “range extender”—a small gasoline motor—will likely boost the price tag to $45,000. Mr. Reithofer said he is taking a long view on the potential of electric vehicles. “If you build such a car…you have to look into the future, 10, 15, 20 years,” Mr. Reithofer said. “If you look around the world, [at] the emissions regulations, in the United States, in the European Union, even in China…cars like the BMW i3 are a must.” Read more of this post

China, whose airline market is dominated by state-owned carriers noted for inefficiency and poor service, will study policies to encourage the budget-carrier model that is sweeping Asia

Updated July 29, 2013, 8:30 a.m. ET

China’s Air Regulator Will Consider Ways to Boost Budget-Carrier Market

Having Lifted Ban on New Independent Airlines, Government Pushes Low-Cost Model

JOANNE CHIU

SHANGHAI—China is taking steps to jump-start the budget-airline business, say people familiar with the situation, a sign of further liberalization in one of the nation’s most tightly regulated sectors. Li Jiaxiang, head of the Civil Aviation Administration of China, told a semiannual CAAC working meeting this month that the regulator plans to study new policies to promote low-cost carriers in the second half of the year, according to people there, who included airline executives. Mr. Li also urged the nation’s smaller airlines to look into the budget model, and established airlines to learn from successful low-cost airlines to improve management standards and operating efficiency, the people said. Read more of this post

China’s top stock-market regulator Xiao Gang Turns Gray as China IPO Freeze Precedes New Rules

Xiao Turns Gray as China IPO Freeze Precedes New Rules

Four months after taking over as China’s top stock-market regulator, Xiao Gang showed up at a government meeting in July with gray hair at his temples.

The salt-and-pepper look provoked debate, even poetry, on China’s Weibo microblog service. Commentators argued whether the challenges of overseeing Asia’s worst-performing major stock market had aged him or if he had stopped dyeing his hair.

Xiao, 54, is stuck between more than 700 companies waiting to raise funds and Chinese leaders led by Xi Jinping who have pledged to clean up corruption. The China Securities Regulatory Commission, under pressure from investors to avoid exacerbating a 25 percent slump in the Shanghai Composite Index (SHCOMP) since July 2010, is drafting rules to curb misconduct that would establish stiff penalties for investment banks before ending an almost 10-month freeze on initial public offerings. Read more of this post

Myanmar’s Yangon More Expensive Than NYC Sparking Boom

Yangon More Expensive Than NYC Sparking Boom: Real Estate

Sean Danley has spent the past six months scouting office space in Yangon after being sent to establish the Myanmar branch of his U.S.-based employer.

He looked in the city’s three sole 1990s-era towers, where annual rents have climbed to more than $100 a square foot, compared with less than $75 in downtown Manhattan, according to broker CBRE Group Inc. Too expensive, he said.

The villas he considered either didn’t have safety exits, weren’t clean, required sharing space with other companies or were in odd locations — all unsuitable to the image of his $29 billion in revenue engineering and construction company, which he said he wasn’t authorized to identify. After seeing 10 places and losing one possibility to someone faster with his “bag of money,” Danley is still looking. Read more of this post

U.S. says JP Morgan manipulated market; settlement seen

U.S. says JP Morgan manipulated market; settlement seen

7:47pm EDT

WASHINGTON (Reuters) – The U.S. power regulator outlined its case of market manipulation against JPMorgan Chase & Co on Monday as industry sources said a final settlement on the issue should come on Tuesday. Traders used improper bidding tactics in California and the Midwest to boost profits, officials said in a statement that brought to light some details of an extensive investigation. Reports of that probe have circulated for months and a deal with the regulator could put an end to a distraction for JPMorgan Chief Executive Jamie Dimon. The U.S. Federal Energy Regulatory Commission (FERC) staff has found “eight manipulative bidding strategies” used by a JPM affiliate in 2010 and 2011, the regulator said. Read more of this post

Taiwan says may tighten tax rule on property trading

Taiwan says may tighten tax rule on property trading

Monday, Jul 29, 2013

Reuters

TAIPEI – Taiwan does not rule out the possibility of tightening a tax rule on trading properties and luxury goods, as it aims to narrow the gap between the rich and the poor. Speculation has helped drive up property prices on the island, especially in the capital Taipei and some other northern cities, and worsened affordability at a time when growth is slowing. Taiwan’s Finance Minister Chang Sheng-ford told reporters over the weekend that studies show the tax has received positive feedback as it has helped curb property turnover and narrowed the gap between rich and poor. The government introduced the so-called luxury tax almost two years ago. Properties that are sold in less than two years after being bought are taxed. A 15 per cent tax applies to properties sold within a year of purchase and 10 ppercent to those sold within two years. A 10 per cent tax applies on sales of luxury goods worth at least T$3 million (S$126,405). One possibility is to collect the tax from buyers, which is what Hong Kong and Singapore have done, Chang said. Another option is to extend the tax-free period to three or four years from the current two years, the minister added.

China has at least 36 local governments with as much debt, on average, as Detroit

China has at least 36 local governments with as much debt, on average, as Detroit

By Jake Maxwell Watts @jmwatts_ 4 hours ago

China’s National Audit Office announced on Sunday that it is conducting a comprehensive review of all local government debt, which has long been considered a potential time bomb that threatens for China’s economy. But how bad is the debt really? An audit that took a sample of 36 local governments at the end of 2012 (15 provinces, their capital cities, the municipalities of Tianjin, Shanghai and Guangzhou, and one district from each municipal city) found that those authorities had taken on a total of 3.85 trillion yuan ($628 billion) in debt, up 12.9% from 2010. That works out to $17.4 billion each—just under the $18 billion in debt held by the US city of Detroit, which filed for bankruptcy earlier this month. Read more of this post

Small Stocks Are in Eye of the Index; Inclusion in Russell 2000 May Distort Some Stock Values

July 28, 2013, 6:46 p.m. ET

Small Stocks Are in Eye of the Index

Inclusion in Russell 2000 May Distort Some Stock Values

JUSTIN LAHART

The Russell 2000 is the benchmark for small-capitalization stocks. But some stocks in it aren’t that small. This may pose a problem for investors, even as the index has been hitting all-time highs. The argument for small stocks is clear. Research has consistently shown that over long stretches small-cap stocks beat their bigger brethren. A driver has been the fraction of fast-expanding small companies on their way to becoming large ones. Yet some of them may no longer be in the Russell 2000. Which stocks Russell designates as small cap counts. The iShares Russell 2000 ETF, IWM -0.40% the ninth largest of all exchange-traded funds, has about $25 billion under management. More than 400 mutual-fund portfolios, with over $370 billion under management, use the Russell 2000, or its subindexes, as benchmarks, said Morningstar. Read more of this post

Startups Take Off in South Korea; Successful Entrepreneurs Reinvesting in Fledgling Companies

Updated July 29, 2013, 12:07 a.m. ET

Startups Take Off in South Korea

Successful Entrepreneurs Reinvesting in Fledgling Companies

JAEYEON WOO

A package for expectant moms in their early pregnancy

SEOUL—When Paek Jin-joo was pregnant with her first baby, it was challenging for her to figure out what she needed to know and buy as an expectant mother. Spending hours looking up the Internet was too time consuming. “I thought to myself how convenient it would be if someone could offer tips and help shop for products necessary for pregnant women,” says the 35-year-old Ms. Paek, who was an office worker at an online education company in Seoul before setting up her own company, 10Box, in October last year. As the U.S. startup scene experiences a slowdown this year, South Korea is one place that is booming. The country is one of the most wired nations in the world with broadband penetration at over 100%. The number of Korean startups has nearly doubled to 28,193 in 2012 from just 15,401 in 2008, according to data from the Korean Venture Capital Association. Steady growth in the number of startups in South Korea in recent years is getting a fresh push from successful entrepreneurs reinvesting in fledgling companies, as well as commitment from the government to provide backing. But competition and scaling the business have been major challenges for some of the country’s startups. Read more of this post

China 3% Growth Risk Seen by Barclays Signals Likonomics Anxiety

China 3% Growth Risk Seen by Barclays Signals Likonomics Anxiety

A copper price collapse of more than 60 percent, zinc cut by up to a half and oil down to $70 a barrel. That’s the fate facing world commodity markets should China’s growth dip to 3 percent in the next three years — a scenario economists at Barclays Plc (BARC) are now examining.

They’re not the only ones building models based on a steep decline in growth in the world’s second-biggest economy. Nomura Holdings Inc. (8604) estimates a one-in-three chance of a sharp drop by the end of 2014, and Societe Generale SA sees a “non-negligible risk” of less than 6 percent growth this year and an outside chance of 3 percent average expansion for this half and next. Read more of this post

How Much Slowdown Can Beijing Tolerate? The notion of a bottom line for growth and stability is a myth. The truth is more complex

How Much Slowdown Can Beijing Tolerate?

July 22, 2013

By Minxin PeiABOUT THE AUTHOR

The notion of a bottom line for growth and stability is a myth. The truth is more complex.

The once-mighty Chinese economy is now headed in one direction only – downward. GDP growth was 7.5 percent in the second quarter of this year, down slightly from 7.7 percent in the first quarter. In the last quarter of 2012, the Chinese economy grew 7.9 percent. The deceleration from 7.9 to 7.5 percent may seem relatively minor – only 0.4 percentage point in six months. However, when annualized, this figure means that the Chinese economy has lost about one-tenth of its growth momentum since last year. Read more of this post

China Plans Urgent Audit of Public Debt

July 28, 2013, 6:43 a.m. ET

China Plans Urgent Audit of Public Debt

Burgeoning Borrowing Adds to Stress on China’s Financial System

PAUL MOZUR and TOM ORLIK

BEIJING—China will conduct an urgent review of overall public debt, highlighting concerns about burgeoning official borrowing that are adding to stress in China’s financial system and limiting Beijing’s capacity to support flagging growth. In a one-line statement on Sunday, China’s National Audit Office said it would carry out an examination of total government debt, acting on the orders of the State Council, China’s cabinet. A separate article in the Communist Party mouthpiece People’s Daily said the order came Friday and that work would begin on the audit on Monday. The article, citing unnamed sources, said the Audit Office would temporarily suspend other projects to begin work on the audit, suggesting the urgency of the task. Read more of this post