Breakingviews

Thai telco bets on yield to defy political turmoil

February 21, 2014

Protests and low valuations make it an odd time for Jasmine to seek $1.4 bln by spinning off its broadband infrastructure assets. With interest rates expected to rise, issuers are under pressure to act while they can. But winning over investors may require a sweet dividend.

G20 can get past angry stares and platitudes

By Edward Hadas
February 20, 2014

This weekend, the world’s leading finance ministers will probably argue about U.S. monetary policy and then agree on a bland statement. That would be an opportunity missed. Now is the right time to work hard on safety rules for capital controls and current account excesses.

Fear and loathing in China’s trust industry

February 19, 2014

The $1.8 trillion sector is the enfant terrible of Chinese finance. The inherent mismatch between long-term loans and shorter-dated investments means trust products depend on confidence to survive. Yet widespread failures are less of a risk than reckless bailouts.

India graft baiter’s exit raises political risk

February 17, 2014

Arvind Kejriwal quit as Delhi’s chief minister after just 49 days. Rather than show him up as inadequate, the move makes him a bigger threat to political stability. By splitting the national urban vote, the anti-business activist could make a closely contested poll chaotic.

Japan index: Trade gap, muted wages raise risks

February 11, 2014

The Breakingviews Abenomics Index improved for the fourth straight month in December. But it masks two risks. A vanishing current account surplus means relying on foreigners to finance bloated public spending. Besides, struggling wage growth could stall private consumption.

Turkish central bank in “whatever it takes” moment

January 29, 2014

The massive overnight hike in interest rates aims to end the lira’s free fall. It soothes concerns about the central bank’s independence and will reassure foreign investors. But it can only work if the government seizes the chance to tackle the economy’s real defects.

Apple numbers show scale of China challenge

January 29, 2014

Disappointing global sales increase pressure on the iPhone maker to gain ground in the People’s Republic. A deal with China Mobile helps. But lifting China market share to just 10 percent requires a 75 percent jump in orders this year. Lower-cost rivals make that a tall order.

Exportless recovery adds to emerging market risks

January 28, 2014

The peso turmoil in Argentina challenges the cheery 2014 consensus on the global economy. Fed’s taper and slowing Chinese demand aren’t the only dangers. Rich nations are recovering without importing more. That, too, could imperil growth and stability in developing countries.

China falls prey to its own capital magnetism

January 27, 2014

Central bankers are worrying that cash is flooding in. Porous capital controls are part of the problem. But by keeping its exchange rate suppressed and using higher interest rates to curb risky shadow banking activity, China has made itself into a big speculative bullseye.

Audit spat pokes hole in China’s financial edifice

January 23, 2014

Large accounting firms broke U.S. rules to avoid breaking Chinese ones. Now they face a six-month bar from the SEC. While it’s hard to feel sorry for the Big Four, investors have staked billions of dollars on China’s grey areas staying grey. Upholding the law may bring big costs.