Breakingviews

China retailers stumble in pursuit of growth

By John Foley

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

China’s growth can be disruptive as well as lucrative. GOME and Li Ning, two of the country’s biggest retail brands, have both reported slumping sales and losses in a market that seems to be expanding. Shifting consumer habits have made competition fierce and profitability elusive.

The first oligarch dies, his kleptocracy thrives

By Pierre Briançon

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

Boris Berezovsky built something that lasted. The man found dead on March 23 may have been alone, broken, bitter, and a shadow of his flamboyant former self as Russia’s richest man and king-maker. Yet the system he invented two decades ago in the throes of the big Soviet meltdown is functioning well. The men at the top may have changed, and turned against their former mentor and master. But the rulers of today’s Russia – both the oligarchs who looted the country’s resources and branched out, and the clique of ex-KGB officials working hard to get their hands on a share of the loot – are Berezovsky’s children.

Abandoned gold loans are India’s “jingle mail”

By Andy Mukherjee

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

The myth that Indians’ love for gold is driven by tradition rather than financial self-interest has been dashed. Falling prices have prompted borrowers who took out loans secured against the yellow metal to break a cultural taboo and abandon their collateral. It’s the Indian equivalent of American homeowners who walked away from their underwater mortgages by mailing the keys to their homes to the bank.

Cyprus will struggle to make gas math work

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

Cyprus’ latest ideas for wiggling out of its financial fix include bundling future gas revenues into a national “solidarity fund”. But Breakingviews calculations suggest the gas discovered to date isn’t worth enough to plug the country’s 5.8 billon euro ($7.5 billion) funding gap.

Exposed bondholders suffer solar burns in China

By John Foley

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

Who wants equity-like risk for a debt-like return? Investors in bust Chinese solar panel maker Suntech got something close when they bought $575 million of convertible bonds back in 2008. Even though the bonds remain unconverted, the company’s bankruptcy could leave them with pennies – little better off than regular shareholders. Yet the lessons appear to be going unheeded.

Next economic “It girl” is about to be discovered

By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The next economic “It girl” is about to be discovered. In 2008, the obscure Baltic Dry Index was suddenly the subject of every financial conversation. The TED spread and the ABX also briefly rocketed to fame. Now, as investors try to find a telltale gauge of when interest rates will start rising, the JOLTS report, forward curves and the overnight index swap could soon be in vogue.

Cyprus exit risk is real – and manageable

By Neil Unmack

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

Is the European Central Bank ready to start a Cyp-riot? It has threatened to cut off Cyprus’ banks if Nicosia doesn’t take a bailout, potentially triggering the country’s exit from the euro. The ECB has threatened to cut off banks and countries before but backed off. This time it may be serious.

Mining saga highlights pitfalls of Chinese M&A

By Peter Thal Larsen

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

Sundance Resources is a case study in what ails Chinese-led takeovers. The Australian miner’s deal to sell itself to Hanlong Mining for $1.4 billion is under pressure after its suitor’s chairman was apparently arrested. The 18-month saga highlights the hurdles facing Chinese bidders, and explains why suitors are often met with scepticism.

Elusive future gas riches can’t help Cyprus now

By Kevin Allison

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

If there are any optimistic Cypriots left, it’s probably because of recent huge gas finds off the struggling Mediterranean island’s coast. But it’s too soon for Cyprus to put hard and credible numbers on its hoped-for resources boom. U.S. driller Noble Energy thinks it has found about 7 trillion cubic feet (tcf) of the fuel under deep water in Cyprus’ Aphrodite gas field.

China rail reform skirts big question: who pays

By John Foley

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

China’s massive rail expansion is good for the economy. Burying it under $420 billion of debt isn’t. The long awaited dismantling of China’s sprawling Ministry of Railways and creation of a new rail company, announced on March 10, is a good moment to change track.