Indian bank recap is painful but necessary

May 30, 2014

India’s wobbly state lenders are short about $45 bln of capital. That’s a bill the new government can ill afford. But acting fast would help ease future headaches. And with post-election euphoria buoying markets, now is a good time to raise equity and debt from outside investors.

Korean chat app sends mixed valuation messages

May 28, 2014

Kakao is going public in a $3.3 bln reverse takeover. That’s just one sixth of what Facebook paid for WhatsApp. The Korean app rules its home market and is profitable, but its metrics offer few clues for valuing rivals. Putting a price on mobile chat is still anybody’s guess.

Piketty spreadsheets set bad Excel example

May 27, 2014

Authors who submit data to scrutiny deserve applause. The Financial Times’ critique of the French economist’s work shows it’s also risky. In a broad study, errors are almost inevitable. But Piketty could have helped himself – and the dismal science – with better Excel etiquette.

Italy’s lesson for Europe: do your homework

May 27, 2014

Matteo Renzi’s European election triumph will supercharge his reforms. The solid showing for a mainline party, despite a sickly economy, demonstrates that a strong domestic politician can be more appealing than euro-bashing. Hollande and Cameron could learn from the Italian PM.

U.S. firms get caught in China spying crossfire

May 26, 2014

China has threatened to block foreign companies due to a cyber espionage row with the United States. For most groups, the People’s Republic is still a small proportion of sales, but a bigger share of potential new orders. China’s weapon is shutting them out from future growth.

Unavoidable coup is awful for Thai economy

May 23, 2014

The latest military takeover fills a power void, but won’t heal the country’s deep divisions. As in 2006, junta-initiated “reform” may be a ruse for the elite to deny political control to rice farmers. The increased risk of violent conflict leaves the economy further adrift. wins rich price despite poor governance

May 22, 2014

The e-commerce group priced its $25 bln IPO above expectations. Investors seem unfazed by the revelation of a $591 mln gift of stock to boss Richard Liu. Investors are buying into his expertise, but a large, unexplained transfer of value days from going public raises red flags.

Russia puts gas-hungry China in a bear hug

May 21, 2014

A planned pipeline gives Russia a new market outside the increasingly frosty EU. For oil major PetroChina this should staunch losses from low regulated prices at home. China gets cheap supply, but at a cost: the optics of the deal shred Beijing’s claims of political neutrality.

Chinese real estate is in real trouble

May 21, 2014

The coming correction could take several forms: shrinking investment, disappearing funding for developers, and lower prices. All three are connected. Financial pressures could be wide-ranging, but a downward spiral in property values is the hardest to reverse.

Alibaba tries out role of the noble monopolist

May 20, 2014

The retailing group effectively owns Chinese online shoppers. Its payment affiliate is the biggest game in town. Both are attractions for the upcoming IPO. As China’s monopoly regime matures, Alibaba’s challenge will be showing its dominance helps the market rather than restricts it.