Breakingviews

China index: economy looking slower than slow

July 3, 2014

Our index fell to 88.6 in May, its lowest reading since 2009. Exports recovered, but the domestic economy was weaker: truck sales and rail freight volumes fell, while growth in sales of residential property was at its lowest level in over a year.

Macau revenue drop augurs further slowdown

July 2, 2014

Online betting on soccer’s World Cup may have contributed to the first year-on-year drop in the enclave’s gaming revenue since 2010. Fewer high rollers and a credit card crackdown didn’t help. That’s okay as long as tourist numbers keep rising. But future growth may be bumpier.

Private equity’s bad habit: Asian minority stakes

July 1, 2014

Buyout firms are spending record amounts on non-controlling shareholdings in Asian public companies. History suggests such investments are fraught with risks. Pressure to deploy capital in a market short of traditional targets is driving a trend fee-paying investors dislike.

Diagnosis of economic malaise lacks credible cure

June 30, 2014

Global growth is feeble and financial markets are piling up risks, says the Bank for International Settlements. Yet its proposed remedies of tighter monetary policy and structural reform are unconvincing. Like everyone else, central banks are still seeking the right medicine.

Numbers show Germany will beat Brazil to World Cup

June 27, 2014

The football-mad host nation has cruised into the knock-out stages of soccer’s jamboree. Some fancied rivals have gone home early. But a Breakingviews calculator – based on hard numbers like transfer value, population and public engagement – suggests Germany will lift the trophy.

Builder’s shaky foundations dent UAE’s credibility

June 27, 2014

Shares in Arabtec have lost more than half their value in six weeks. The abrupt resignation of its CEO, uncertainty over sovereign support and poor communication are to blame. It’s a warning to investors attracted to the country by its new emerging market status.

U.S. drought could spark economic water warfare

June 26, 2014

Scarce rains have left California and the U.S. Southwest dry just as industries from beverages to semiconductors grow concerned about the availability of H20. That presents a flood of opportunity for water tech firms and Great Lakes states like Indiana, Michigan and Wisconsin.

Biggest risk of geopolitics is as a distraction

By Edward Hadas
June 26, 2014

Fears that war and foreign policy chaos will disrupt the global economy have insidiously crept into the minds of investors, Barclays discovered. In reality, despite deterioration in the Middle East, the global balance is broadly positive. There are bigger things to worry about.

China’s subway splurge only half on right track

June 26, 2014

Building more tube lines is a good idea. Asking international investors to fund them is not. Beijing’s $190 mln subway bond may be an exception. But given the positive externalities, urban transport is one thing China needn’t be coy about funding from the public purse.

Japan’s corporate tax cut could harm Abenomics

June 25, 2014

Prime Minister Shinzo Abe wants to prove his reform credentials by slashing the levy below 30 pct. But Japan’s tax-to-GDP ratio is low, and public debt is high. A concession for companies could mean a bigger levy for consumers. That would undermine Abe’s anti-deflation campaign.