Nov 20, 2013 11:39 UTC

Equity optimists may fast create a crowded trade

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By Swaha Pattanaik

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

Many large institutional asset managers expect developed stocks to march higher next year. They predict that companies will ramp up capital expenditure and fiscal policy will become less restrictive. That may well happen. The risk is that too much money is chasing the same idea. Crowded trades are rarely safe bets.

Nov 19, 2013 08:09 UTC

Aussie dairy battle needs cheap debt to stack up

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By Ethan Bilby

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

Australia’s dairy battle needs cheap debt to stack up. Three bids in as many days for Australia’s Warrnambool have lifted the price tag above A$500 million ($469 million). Local cost savings and projections of China’s thirst for foreign milk help justify the frenzy. But the investment case rests on low borrowing costs.

Nov 18, 2013 04:24 UTC

The ‘Abe put’ will keep Japanese equities buoyed

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By Peter Thal Larsen

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

Say sayonara to the “Bernanke put” and hello to Shinzo Abe’s alternative. While the Federal Reserve chairman developed a reputation for supporting the price of bonds, the Japanese prime minister’s reforms are designed to push up stock prices.

Nov 14, 2013 18:41 UTC

Snapchat bid triples Facebook’s desperation

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By Robert Cyran

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

Facebook’s Snapchat bid shows triple the desperation. The social network shelled out $1 billion for no-revenue Instagram a little over a year ago. Now it’s said to be dangling as much as $3 billion to lure in a mobile app that sends self-destructing digital images. Facebook’s apparently escalating need to buy off marauders at its moat suggests its defenses may be scalable.

COMMENT

It is an indication that the technology-bubble is alive and well. Eliminating competition has always been a basic premise of market economics so the business practices of Facebook are not so much a behavioral anomaly but almost an industry-standard. Even overpaying for a business property that enhances monopoly power is a practice that has made Google, Microsoft and Cisco Systems very successful in the technology sector, and all three have had tremendous corporate success doing it. So (as the author notes), it remains to be seen how this will work out for Facebook in the long term. But the operating margins in gaining and maintaining technology monopolies may be so high, that there is plenty of room for error so that what seems now to be outright desperation in controlling competitive technology threats may turn out to be prescient foresight.

And who would have thought…?

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Nov 13, 2013 07:44 UTC

Four ways to tell China is serious about markets

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By John Foley 

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

China’s new buzzword is “decisive”. That’s how the ruling party described the role it wants markets to play in the economy. It’s hard to see whether it’s more than just talk. But there are four visible ways to tell whether China means business.

Nov 8, 2013 02:07 UTC

Suntech casts shadow over China capital raisings

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By John Foley 

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

Suntech has gone from solar panel maker to financial black hole. The stricken company is fighting with creditors who want to see it liquidated after it defaulted on interest payments in March. Proposals to sell assets and take Chinese government cash seem unlikely to help investors avoid huge losses. For investors it’s a lesson in what happens when things really go wrong with Chinese companies.

Nov 6, 2013 06:20 UTC

U.S. investors’ love of tech defeats fear of China

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By Peter Thal Larsen

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

For U.S. investors, love of technology has conquered a fear of China. Shareholders are snapping up shares of Chinese internet companies going public stateside. It’s a striking contrast with the recent past, when accounting scams and poor governance prompted many to shun mainland stocks.

Nov 5, 2013 15:28 UTC

BMW profit miss just a bump on safe road

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By Olaf Storbeck

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

BMW shares tanked more than 3.5 percent on Nov. 5 after the carmaker released third-quarter earnings that fell slightly short of expectations. Investors should pause and relax. Even though earnings before interest and taxes are down 6 percent year-on-year, the results actually reflect the company’s strengths more than its weaknesses. Profit is down for a good reason.

Nov 1, 2013 19:46 UTC

Twitter may grow fat and happy on low-patent diet

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By Reynolds Holding

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

Twitter could grow fat and happy on its low-patent diet. The social network, which is due to go public in the next few weeks, has an incredibly slim portfolio of intellectual property. Its nine patents may leave Twitter vulnerable to lawsuits and light on proven assets. But a policy of allowing engineers some control over their inventions speeds innovation, lures top talent and cuts legal costs.

Nov 1, 2013 07:01 UTC

Sony stumble gives Loeb headache and opportunity

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By Peter Thal Larsen

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

Sony may have given Dan Loeb a headache – and an opportunity. The Japanese group’s quarterly loss knocked almost 12 percent off its market value by midday on Nov. 1 and raised questions about the company’s revival. Poor results from Sony’s entertainment and electronics arms suggest there’s limited upside from the spinoff that activist investor Loeb proposed earlier this year. However, it may give him a chance to push for more radical restructuring.