Malaysia Airlines plight points to riskier world

July 18, 2014

Fatal air passenger accidents almost never happen. Malaysia Airlines has been struck by tragedy twice in four months. The aviation industry has its own challenges. Yet even more robust businesses need to consider political risk carefully.

London real estate at an inflection point

July 17, 2014

Property values in the UK capital are up 20 pct in a year. But leading indicators – buyer enquiries, new mortgages and volumes – have stalled. For prices to hold, foreign buyers will have to spend more in spite of a stronger pound and punitive taxation.

Asia’s solid exterior hides internal weakness

July 17, 2014

While more competitive currencies and improving trade balances are making the region externally resilient, sputtering GDP growth is enfeebling it from within, especially since the slowdown is occurring amidst a large debt overhang. Monetary stimulus is an option – but a risky one.

China’s “De-IOE” campaign takes a bite out of tech

July 16, 2014

Beijing has been nudging state enterprises to wean themselves off U.S. software and service firms, chiefly IBM, Oracle and EMC. The drive, which accelerated after Washington indicted Chinese army officials, has dimmed the brightest star in Big Tech’s otherwise dull constellation.

Has Yum outlived its usefulness to China?

By Rob Cox
July 15, 2014

The Kentucky Fried parent earned respect – and profits – less by currying favor with Beijing, more by doing good business. Innovations like a safe food-supply chain benefited the country. But having created the standard, Yum is now struggling to revitalize its recipe.

Citi settlement imposes awfully pricey babysitter

July 14, 2014

An ex-prosecutor will watch the bank as part of its $7 bln deal with Uncle Sam. That may ensure compliance. But as Apple and others can attest, monitors are too often meddlers fond of excessive oversight and multimillion-dollar fees. Shareholders get stuck with the tab.

China’s corruption purge nears tricky second phase

July 15, 2014

The crackdown is gathering speed; enough heads have rolled to show the campaign against graft is real. What follows is no less tough: to replace lost GDP growth, to put fairness above factionalism, and to ensure that good behaviour is rewarded sufficiently well.

Banco Espirito Santo could lure periphery bulls

July 15, 2014

The stock has fallen sharply again. Forced selling for margin calls may be the main reason but a capital hike is needed to stabilise matters. On a gloomy analysis, the Portuguese bank probably still has a sliver of equity. That suggests opportunity for a private-sector saviour.

German soccer glory was predictable – with luck

July 13, 2014

Brazil’s World Cup was first-rate entertainment, thanks to many surprising results. In finance, as in sport, forecasting is a dangerous game. But it is where the greatest value lies. The key is to draw conclusions from pertinent facts. Luck helps, too.

If only Argentine economy matched soccer success

July 13, 2014

The nation’s strong World Cup showing reflects astute management of its big fan base and valuable on-field talent. That contrasts with a 100-year record of wasting its human and natural resources. Avoiding policy own-goals could one day make Argentina an economic champion, too.