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from Breakingviews:

Chinese remedy offers little salve for Bill Ackman

By John Foley

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

William Ackman is now tilting at pyramids in China. In the latest phase of the uppity investor’s year-long battle against Herbalife, he argued on Tuesday that the nutritional supplements and diet pill maker violated local laws that ban certain multilevel marketing strategies. The Pershing Square Capital founder raises some good questions. For all the effort, though, it’s hard to see how China will help confirm his ultra-bearish thesis.

On one level, Ackman’s new tack is smart: China hates pyramid schemes as much as he does. Direct sellers like Herbalife and Avon are forbidden from incentivizing distributors to recruit new agents beneath them. Ackman’s main thrust is that Herbalife gets around that by dressing up commissions as “hourly consulting fees,” and overstepping agent payments capped at 30 percent of revenue.

Ackman’s timing also looks well-calculated. Motivated by the new Chinese leadership’s anti-corruption drive, twitchy authorities have zealously singled out large foreign brands like GlaxoSmithKline and Danone for perceived rule-breaking. Direct selling rival Nu Skin is already being investigated by a domestic business regulator for illegal selling practices. Ackman says his message is in part directed to the Chinese government.

from Breakingviews:

Credit chains are China’s weakest link

By John Foley

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

China’s debts are troubling – and not just because they’re alarmingly big. An equally worrying threat to the country’s prosperity is the complexity of those debts. That’s the trouble with China’s lengthening “credit chains”.

from Breakingviews:

China internet duo join forces against common foe

By Peter Thal Larsen and Robyn Mak 

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Two of China’s internet companies are joining forces against their common foe: Alibaba. Tencent is injecting its also-ran e-commerce units and $215 million in cash into JD.com for a 15 percent pre-IPO stake in the online retailer. More importantly, the two will collaborate on mobile commerce. Both have the same objective: erode Alibaba’s dominant market share.

from Photographers' Blog:

Making it as a masseuse

Zhengzhou, China
By Jason Lee

I have to admit that I’m a massage addict. I’m hooked on the magical, relaxing effects that massage has, especially after a tiring day of shooting pictures that leaves many of my muscles sore.

My love for the art and my sense of curiosity brought me to the Chinese city of Zhengzhou to photograph the training center of a leading massage company – Huaxia Liangtse.

from Breakingviews:

Search for China’s “Bear Stearns moment” is flawed

By Peter Thal Larsen

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

Once again, investors are facing warnings about China’s “Bear Stearns moment”. The country’s possible first domestic bond default has prompted comparisons with the sequence of events that led to the bailout of the Wall Street firm. The parallels between China’s predicament and the crisis of 2008 may be tempting, but are flawed. If the analogy has any use, it’s as a reminder of which mistakes to avoid.

from Breakingviews:

Deadly assault brings new kind of risk to China

By John Foley

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

The shocking knife attack that left at least 33 dead in Kunming railway station brings a new kind of risk to China. Investors’ belief in the relative stability of the People’s Republic has allowed it to weather political purges and border disputes without upsetting asset prices or capital flows. But rising ethnic tension could lead to a damaging recalculation at a fragile time.

from Breakingviews:

Macau casino stocks are priced for perfection

By Ethan Bilby

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

Macau’s casino stocks are priced for perfection. A building boom will expand capacity in China’s gambling enclave. But to justify their valuations, gaming operators not only need to attract more punters but encourage them to spend more at the tables. Any slowdown or increased competition could test excited multiples.

from Breakingviews:

SoftBank’s Alibaba stake both blessing and burden

By Una Galani

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

SoftBank’s investment in Alibaba must be one of the most successful of all time. Billionaire chief Masayoshi Son injected just $20 million into the Chinese e-commerce giant in 2000. Today, the 36.7 percent shareholding accounts for a large chunk of Japanese group’s market value. As Alibaba heads toward an initial public offering, however, Son’s investment blessing may become a burden.

from Counterparties:

MORNING BID-All the metal in China

Without a lot of fanfare, the U.S. equity market has worked its way back to a few points of all-time highs, as concerns over emerging markets (largely related to Ukraine) have magnified, as have worries over China's struggling growth.

That's once again produced the "best house in a bad neighborhood" effect for the U.S. stock market; bond yields remain range-bound in the 2.70 to 2.75 percent area, the 10-year still reflects a value that doesn't suggest economic acceleration or worries over massive slowing either.

from Anatole Kaletsky:

The case against a Chinese financial crisis

A severe slowdown in China is viewed as among the greatest risks facing the world economy this year, and Thursday’s dismal news on Chinese manufacturing output exacerbated these fears. But the really important news from Beijing pointed in the opposite direction: Bank lending in China, instead of slowing dramatically as many economists had expected, accelerated in January to its fastest growth in four years.

This means China is unlikely to act as a brake on the global economy in the months ahead -- despite the recent weak manufacturing figures. It also suggests that predictions of a credit crunch or financial crisis in China will likely prove wrong -- or at least premature.

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