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from Breakingviews:

Asia’s top-down corporate reforms vary in promise

By Una Galani

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

Asia is in the throes of a top-down corporate reform drive. Newish leaders in China, India, South Korea and Japan are pushing to overhaul the way companies work. Their efforts to increase corporate efficiency are welcome. But investors eyeing better returns will find not all reforms are equal.

The need for intervention is clear. The spread between the return on invested capital and the weighted average cost of capital for non-financial corporations in Asia, excluding Japan, has sunk from 3 percentage points in 2010 to just 0.6 percentage points last year, according to CLSA.

Graphic: Company returns are languishing

In China, historical emphasis on growth and employment over profitability at state-owned entities – combined with a lack of effective checks and balances - has led to inefficient capital allocation. In an effort to solve the problem, President Xi Jinping has promised to bring in more private investors. Officials have already engineered a backdoor Hong Kong listing of state-controlled CITIC Group, one of the country’s largest conglomerates. Energy giant Sinopec is evaluating offers for a 30 percent stake in its retail business.

from Breakingviews:

China Mobile’s foreign foray risks meagre returns

By Ethan Bilby

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

China Mobile is using its cash pile to hunt for growth overseas. If past industry experience is any guide, however, returns could be meagre. Many other mobile operators have failed to create value through cross border tie-ups.

from Breakingviews:

Sinopec petrol sale attracts a motley bunch

By Ethan Bilby

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

Sinopec’s petrol station stake sale could drum up a mixed bunch. The Chinese oil giant is seeking investors to help develop Sinopec Sales, which operates its vast network of filling stations. Prospective buyers from food retail, energy, technology and private equity have been shortlisted, according to Reuters. But the price tag of around $16 billion for a 30 percent stake could force them to club together.

from Breakingviews:

Alibaba deal spree turns from romance to thriller

By John Foley 

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

Alibaba’s investment story has turned from romance to thriller. Its Hong Kong movie-making affiliate has uncovered “possibly non-compliant” accounting just four months after the Chinese e-commerce giant bought a 60 percent stake. It’s not clear whether Alibaba’s controls were flawed – but it certainly raises questions about the value of the company’s recent investment binge.

from Breakingviews:

China data puts economists to the Rorschach test

By John Foley 

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

Is China’s economy stable or stuttering? Swings in credit and investment reflected in data released on Aug. 13 support conflicting views. Broadly, things look on track. But uncertainty can be damaging if it undermines the confidence of the people who matter most: consumers and depositors.

from Photographers' Blog:

Singing from the heart

Beijing, China

By Jason Lee

Every night from 7pm until around midnight, anyone in Beijing who craves a bit of music can go and enjoy an “open-air concert” in the southeast of the city.

Street musician Zhang Mingyuan sings during his daily performance at a square outside a shopping mall in Beijing

The singer, Zhang Mingyuan, isn’t part of a famous music label and his performances are just held on a street corner. But even so, the warm atmosphere that he creates in the chilly night air seldom disappoints.

from Counterparties:

MORNING BID – Margins, China and whatever else

We’re deep into a period where the earnings calendar has basically dried up and the news flow overall is pretty slim, so the market will hang whatever gains it can on thin reeds – deals involving master-limited partnerships here, results from the likes of Sysco (the food services company there), and maybe Priceline.com in the mix too. The broader economic signals remain the more important ones for markets right now, and while they’re not uniformly outstanding, there are some hopeful signs for those finally looking for an acceleration in activity.

The earnings situation has been better than anticipated – Goldman Sachs notes that margins broke out of an 8.4-to-8.9 percent rate in the second quarter, ticking up to 9.1 percent, and the firm’s corporate “Beige Book” – a compendium of company comments – shows that the concerns the C suite has looks more like the concerns of those seeing accelerating demand and rising prices, and not slack demand and weak pricing power. They cited a strengthening corporate outlook, margin forecasts coming under pressure as a result of inflation expectations, and a combined focus on spending money on both buybacks and capital investment. Furthermore, companies have been less negative than in the recent past when it comes to revisions, and guidance for the fourth quarter of this year and first quarter 2015 was revised higher.

from Breakingviews:

Aircraft leasing flies back into vogue in Asia

By Peter Thal Larsen

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

Aircraft leasing is flying back into vogue in Asia. Many Western groups jettisoned the business of buying and renting out planes after the financial crisis. Now China’s sovereign wealth fund and tycoon Li Ka-shing are considering climbing on board. Strong forecast demand for aircraft explains the appeal – as long as finance is cheap and reliable.

from Breakingviews:

China’s e-commerce secret weapon: the delivery guy

By John Foley 

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

Want a Big Mac delivered to your door in minutes? Or a refrigerator by the end of the day? While U.S. retailers puzzle over how to make that happen, China’s e-commerce companies are already there. Servicing the country’s web-connected consumers at ever-faster speeds is driving some big businesses, not to mention stock market valuations. The secret weapon: the humble delivery guy.

from Full Focus:

Earthquake in China

The death toll rises after a 6.3 earthquake in southwestern China triggers landslides and causes thousands of buildings to collapse.

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