Archive
Reuters blog archive
from Breakingviews:
Bangladeshi accord shows limits of market forces
By Edward Hadas
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Tragedy can concentrate minds; minds can be more powerful than markets; globalisation can be a force for good. Those are the lessons of the success of the Accord on Fire and Building Safety in Bangladesh.
Business is never so powerful that owners can monopolise the gains of economic development. Labour conditions in Bangladesh would probably have improved eventually, even if the factory at Rana Plaza had not collapsed on April 24, killing 1,127 people. It was the process of national enrichment that pushed Chinese wages high enough to shift the labour-intensive garment trade to Bangladesh and other poorer countries.
The key word is “eventually”. Until the latest industrial catastrophe, the Bangladeshi producers, the national government and consumers in the developed world were all basically content with sharp price competition, very low wages and lax safety standards. It looked like progress was going to be slow.
from MacroScope:
No Let(ta) up for euro zone
Fresh from winning a vote of confidence in parliament, new Italian Prime Minister Enrico Letta heads to Berlin to meet Angela Merkel, pledging to shift the euro zone’s focus on austerity in favour of a drive to create jobs. He may be pushing at a partially open door. Even the German economy is struggling at the moment and the top brass in Brussels have declared either that debt-cutting has reached its limits and/or that now is the time to exercise flexibility. Letta will move on from Berlin to Brussels and Paris later in the week.
France, Spain and others will next month be given more time to meet their deficit targets and Berlin does not seem to object. Don’t expect Merkel to join the anti-austerity chorus but there are some hints of a shift even in Europe’s paymaster. Yesterday, it launched a bilateral plan with Spain to boost lending to smaller companies and said it could be rolled out elsewhere too. Details were very sketchy but something may be afoot. The European Central Bank, expected to cut interest rates on Thursday, is considering something similar although that is far from a done deal.
from Global Investing:
‘Ivanovs’ keen on new cars despite high inflation – Sberbank
Sberbank's hypothetical Russian middle-class family metric - the 'Ivanovs'- shows the average Russian family is concerned about high inflation, though that is still barely denting some peoples' aspirations of getting behind the steering wheel of a new car.
April's Ivanov index, a survey of more than 2,300 adults across 164 cities in Russia with a population of more than 100,000, notes people are still concerned about persistently high inflation, which in Russia is at around 7 percent.
from Breakingviews:
J.C. Penney exposes inefficiency valuing CEOs
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The debacle at J.C. Penney exposes a glaring inefficiency in how the market values corporate chieftains. When the struggling U.S. retailer hired Apple whiz Ron Johnson in 2012, the company’s equity value spiked by more than $1 billion. On Monday evening, news of his departure added $350 million. The return of ex-Chief Executive Mike Ullman - the man Johnson replaced - swiftly erased some $700 million. Such big swings make no sense.
from Breakingviews:
China retailers stumble in pursuit of growth
By John Foley
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
China’s growth can be disruptive as well as lucrative. GOME and Li Ning, two of the country’s biggest retail brands, have both reported slumping sales and losses in a market that seems to be expanding. Shifting consumer habits have made competition fierce and profitability elusive.
from Breakingviews:
Maybe “Gucci” didn’t work. But “Kering”: really?
By Quentin Webb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
It sounds like caring, there’s a hint of Breton, and it comes with an owl. PPR is becoming “Kering”. Renaming the parent company will hardly deter buyers of the French group’s illustrious brands, such as Gucci or Bottega Veneta. But this latest corporate offence against language hints at worrying groupthink within PPR - sorry, Kering - HQ.
from Global Investing:
Online shopping to hit UK property investors
By Stephen Eisenhammer
As the way we shop changes, commercial property investors might be the ones losing out.
The rise of online retail is hitting demand for bricks and mortar shops, according to analysts at Aviva Investors, and could spell an end to rental income growth over the next two decades.
from Breakingviews:
Offices Depot and Max lucky to have each other
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Office Depot and OfficeMax are lucky to have each other. Uniting the U.S. purveyors of pens, paper clips and printer toner is about as obvious as it gets in M&A. The potential synergies could be worth more than the market value of the two companies combined. As the Internet ravishes retail, at least this corner can cling to life by merger.
from Breakingviews:
Japan tensions rewrite China shopping lists
By Katrina Hamlin
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
China’s buying habits have taken on an air of the patriotic, at least where Japan is concerned. As tensions rose last year over who owns a group of remote islands, sales of Japanese cars and arrivals of Chinese tourists showed a marked slowdown. Even Chinese acquisitions of Japanese companies fell in the last quarter of 2012.
from Global Investing:
Russia’s consumers — a promise for the stock market
As we wrote here last week, Russian bond markets are bracing for a flood of foreign capital. But there appears to be a surprising lack of interest in Russian equities.
Russia's stock market trades on average at 5 times forward earnings, less than half the valuation for broader emerging markets. That's cheaper than unstable countries such as Pakistan or those in dire economic straits such as Greece. But here's the rub. Look within the market and here are some of the most expensive companies in emerging markets -- mostly consumer-facing names. Retailers such as Dixy and Magnit and internet provider Yandex trade at up to 25 times forward earnings. These compare to some of the turbo-charged valuations in typically expensive markets such as India.
