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from Breakingviews:

Real estate rescue may not help China’s developers

By John Foley

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

If you cheapen it, they will come. China’s large real estate companies are going all-out to shift their properties, aided by recent reductions in mortgage rates and the relaxation of local restrictions on who can buy. When developers sell more for less, however, there is grief ahead.

China’s biggest homebuilders have been reporting positive sales even as the overall market has contracted 11 percent this year, according to official data. In big cities, sales in the week-long October holiday were almost back to last year’s level, according to data cited by Credit Suisse.

Investors buy the “flight to quality” theory. Overextended companies like Agile Property and R&F have been punished: their shares are down sharply this year. But the median share price of the forty biggest listed Chinese developers is up 15 percent. Their average price-to-book ratio of 1.4 is just below the three-year average of 1.6. The logic is seductive – their plots are better, and their houses more livable.

from Breakingviews:

CICC loses a princeling, gains investment appeal

By John Foley

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

To lose a princeling looks careless, but no worse. That should reassure backers of China International Capital Corp, the Chinese investment bank whose well-connected chief executive has just resigned.

from MacroScope:

ECB in the dock

Protestors left some barbed wire in front of the euro sign landmark outside the headquarters of the ECB before its monthly news conference in Frankfurt

The European Court of Justice holds a first hearing on the legality of the European Central Bank's Outright Monetary Transactions programme. There won’t be anything definitive today but it serves to rekindle debate about the limits of the ECB’s powers.

In February, the German Constitutional Court asked the European Court to rule on the legality of OMT, the mechanism that drew a line under the euro zone crisis when it was unveiled in 2012. The court may give guidance about how best to make a final ruling which is expected in late spring next year.

from Breakingviews:

China’s Agile Property only the worst of the best

By John Foley

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

Agile Property is crumbling. The Chinese real estate developer needs urgent financial assistance after the authorities detained its chairman and it had to cancel a $360 million rights issue. The shares fell by as much as 30 percent on Oct. 13. Yet in China’s property sector, it is just the worst of the best.

from MacroScope:

Greek confidence vote

A Greek and an EU flag flutter in front of the temple of the Parthenon during the takeover ceremony of the six-month rotation of Greece's EU Presidency in Athens

Greece’s ruling coalition will hold a confidence vote in parliament this evening in an effort to end speculation that the country may be facing snap elections early next year.

Prime Minister Antonis Samaras wants to use the vote to gain support for his candidate in a presidential vote. Under Greek law, parliament must be dissolved if a president cannot be elected. The radical leftist Syriza, which has a sizeable lead in opinion polls, has pledged to block Samaras's pick.

from Breakingviews:

Hong Kong weathers Occupy’s financial disruption

By Robyn Mak

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

Hong Kong’s economy is coping with pro-democracy protests, now heading into their third week. Some retailers and other businesses have suffered and traffic is bad, but the city’s financial system is undisturbed. A prolonged standoff between protesters and the government matters less to investors than the slowdown in consumption and spending in mainland China. Warnings that the movement would threaten Hong Kong’s financial health look misplaced.

from The Great Debate:

Why Hong Kong showdown could never have morphed into Tiananmen 2.0

rad -- alan chin

As pro-democracy protesters in Hong Kong confronted police in the fumes of tear gas, the world looked on in admiration of their spirit and bravery and in fear of a possible crackdown.

Those who dreaded a Tiananmen-like scenario in Hong Kong can now breathe a sigh of relief. The standoff came to a peaceful end. But the protesters failed to achieve their basic goal -- reversing Beijing’s Aug. 31 decision to restrict elections to candidates the Chinese Communist Party approves of. They couldn’t even force the city’s chief executive, C.Y. Leung, to resign.

from Breakingviews:

Tianhe investors sell first, ask questions later

By Peter Thal Larsen

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

Investors in Tianhe Chemicals are selling first and asking questions later. Shares in the Chinese company plunged by as much as 45 percent when they resumed trading after anonymous fraud allegations. Despite the company’s detailed rebuttal, some of the dirt has stuck. Big shareholders may have to reach into their pockets to restore confidence.

from Breakingviews:

Glencore Rio takeover would be harder than Xstrata

By Kevin Allison

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

A Rio Tinto takeover would be harder than Glencore’s 2012 swoop on rival Xstrata. While there’s some logic to a tie-up with the world’s second-biggest iron ore producer, the Swiss miner-trader will be loath to pay a big premium, and the culture clash would be extreme. Rio is also in a better position than Xstrata to resist.

from Breakingviews:

China has two bad role models on dealing with debt

By Andy Mukherjee

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

Economies binging on leverage are all alike – fast-growing and happy. But each country struggling to pay down debt is unhappy in its own way.

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