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from Breakingviews:

Malaysia Airlines plight points to riskier world

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Fatal air accidents almost never happen, fortunately for both passengers and investors in airlines. Yet Malaysia Airlines has been struck twice by tragedy in little over four months. The aviation industry may have its own set of challenges, but it is a reminder that even more robust businesses need to consider political risk carefully.

A long-range surface-to-air missile is suspected to have brought down flight MH-17 killing all 298 people on board when it crashed over eastern Ukraine on July 17. Another Malaysia Airlines flight en route to Beijing disappeared in March without a trace. The chances of either were vanishingly small. Fatal accidents per a passenger departure have more than halved in number since 1990, according to the International Air Transport Association.

The airline industry is one of the least able to financially absorb shocks. High oil prices and intense competition for market share have already driven several close to the brink. In Asia, high levels of government ownership set the scene for undisciplined expansion. State-controlled and loss-making Malaysia Airlines was already planning to announce a major restructuring within the next year. That may now need to be accelerated.

from Breakingviews:

Alibaba finance arm better out than in for IPO

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Alibaba’s secret weapon is its payment division. Yet Alipay isn’t part of the Chinese e-commerce company’s upcoming initial public offering. The company is “conceptually” thinking about reuniting them, according to people familiar with the situation. But the status quo, however strange, looks better.

from The Great Debate:

A three-part plan for Obama’s pivot to Asia

President Obama embarked this week on an eight-day trip to Japan, South Korea, Malaysia and the Philippines. He has tried to reassure the leaders of those countries that his administration is committed to carrying out its signature foreign policy initiative: the rebalance towards the Asia-Pacific.

Obama entered office with the belief that the U.S. had over-invested in the Middle East, particularly in Iraq and Afghanistan. In an October 2011 essay-cum-policy statement, then-Secretary of State Hillary Clinton explained that with the wars in Iraq and Afghanistan winding down, the U.S. should “pivot” to the Asia-Pacific. In January 2012, the Department of Defense formalized her recommendation, announcing that the U.S. would “of necessity rebalance” towards the region.

from Breakingviews:

Privatisations a bright spot for gloomy Aussie M&A

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Privatisation is a bright spot in what looks to be an otherwise dreary year for Australian dealmakers. The country is set for a flurry of activity as cash-constrained local governments prepare to flog existing infrastructure assets in order to fund new projects and create jobs.

from Breakingviews:

Alibaba tests the limits of non-bank banking

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Alibaba isn’t a bank. But for customers it’s getting hard to tell the difference. Users of China’s dominant e-commerce website can now deposit funds, make investments, take out loans and even give out gifts of virtual cash. In taking on China’s lenders, Alibaba and its online rivals may be taking on bank-like risk.

from Breakingviews:

China’s “biggests” come early, late or not at all

By Ethan Bilby and John Foley
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

China collects superlatives. In 2013, it added biggest goods trader, top red wine consumer and number one oil importer. Some “biggests” are a sign of investment potential, but others suggest inequality and inefficiency. Meanwhile, some of the most meaningful, like having the world’s dominant currency, still look a long way off.

from Breakingviews:

IPO flops will come back to haunt Li Ka-shing

By Una Galani
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Li Ka-shing’s stock market flops will come back to haunt the tycoon when it matters most. His latest spinoff, utility HK Electric, has become the third listing in a row from the businessman’s energy-to-telecoms empire to fizzle. Though markets are soft, Li’s reputation for selling at the top may make it harder to get a premium valuation if he decides to press ahead with an initial public offering (IPO) for his prized health and beauty retail business, A.S. Watson.

from Breakingviews:

Smog obscures looming water risk for China

By Katrina Hamlin
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

China’s smog is visible, and vexes the urban rich. But attempts to fix the looming “airpocalypse” may be exacerbating another acute risk: water. If the country’s planners really want to make growth sustainable, they will need to pull the plug on cheap supply for thirsty energy companies and consumers.

from Expert Zone:

Solving the Indo-Japanese equation

(Any opinions expressed here are those of the author and not of Thomson Reuters)

In geopolitics, neighbours rarely make great alliances. However, distance does not impede strong partnerships.

In the case of Japan and India, historical bonds nurtured by Buddhism and the Japanese providing the wherewithal to freedom fighter Subhas Chandra Bose for the Indian National Army, provides for the necessary people-to-people connect.

from Breakingviews:

China’s dash for dairy based on frothy forecasts

By Ethan Bilby
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Foamy figures about the popularity of drinking milk in China have lifted share prices of domestic milk producers and fuelled one of the biggest mainland initial public offerings of the year, Huishan Dairy's $1.3 billion debut last week. China’s market potential is large, but the rate of growth may be leaner than advertised by milk industry bulls.

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