Breakingviews

Tokyo Electron takeover is no template for Japan

October 3, 2013

Applied Materials wooed its smaller rival with an all-stock merger and shared governance. Other buyers may try a similar approach to tempt Japanese partners to the altar. But a large chunk of Tokyo Electron’s stock is already held overseas. Other targets lack that advantage.

E-book: China’s mounting debt problem

September 24, 2013

The country’s economic rise is built on cheap finance. But with debt nearing 200 percent of GDP and much investment wasted, the foundations are looking shaky. “The East is Red” examines the origins of the boom, the current strains, and the painful choices China now faces.

Emerging markets’ foreign debt is no time bomb

September 18, 2013

Companies and banks in developing countries have borrowed almost $6 trillion from foreign lenders, a 50 percent jump in four years. But unlike the 1990s, a big chunk of this debt is from local subsidiaries - and in local currencies. That lowers the risk of a funding crunch.

China’s online land grab risks value mudslide

September 17, 2013

Tencent’s $448 million offer for a stake in search engine Sogou says less about value creation, and more about fear of losing out. While mobile strategies are starting to pay off, the ultimate size of the market remains unknown. Investors seem happy to take the risk.

Summers smart enough to avoid Fed chair battle

September 16, 2013

Despite the support of the embattled U.S. president, the former Treasury chief faced opposition from both liberal Democrats and economists. Summers says it’s better for the recovery not to have the fight. That may be true - unless his exit from the race opens new fissures.

Lower-cost iPhone won’t fill Apple’s China hole

By Breakingviews Columnists
September 12, 2013

The latest model is cheaper and will work on China Mobile’s upgraded network. But at more than $700, it’s still too expensive to appeal to the masses. Apple will need to do more to reverse its status as an also-ran in the world’s largest smartphone market.

Big Oil’s growth addiction is counterproductive

September 11, 2013

The industry pours billions into projects with marginal returns to keep production rising. Yet the oil majors’ huge size means big new finds barely move the needle. Oil bosses should ditch their fixation with growing output. The sector’s best option may be to shrink.

Apple gives finger to the skeptics

September 11, 2013

New plastic and gold iPhones arrived with software, speed and camera upgrades. In lieu of a watch or TV, biometric security features provided the wow factor. Though the bottom-line benefits for Apple aren’t immediately clear, it may have just started a mobile payments revolution.

Suntory pays up to quench thirst for Japan escape

September 10, 2013

The Japanese firm is spending $2.1 bln on British soft drink brands Ribena and Lucozade. The multiple of almost 14 times EBITDA looks an expensive way to cut exposure to a tough domestic market. But Suntory’s overseas M&A track record should give it the benefit of the doubt.

Japan index: Wages and consumption stymie recovery

September 9, 2013

Firmer prices, stronger bank lending and higher manufacturing output helped the Breakingviews Abenomics Index reverse half the previous month’s decline in July. But unless wages and spending rise, Prime Minister Shinzo Abe will struggle to win his war against deflation.