Jun 24, 2013 10:27 UTC

China’s bonfire of liquidities claims first victim

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By John Foley

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

China’s bonfire of the liquidities has claimed its first victim: equities. Stocks in Shanghai and Shenzhen tumbled more than five percent on June 24 after the central bank published a letter suggesting it’s in no rush to help overstretched lenders continue in their bad habits. This tough new approach could mean a little more chaos will be injected into China’s financial system. For the economy overall, it’s both positive and helpful.

Jun 21, 2013 07:04 UTC

China credit squeeze challenges “age of ambiguity”

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By John Foley

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

Silence has been good policy for China. The authorities’ penchant for relying on the unsaid, especially when it comes to financial obligations, has been a useful tool for channeling funding to banks and companies. But recent ructions in the interbank market, where lenders turn for short-term funding, suggest the age of ambiguity may soon have to end.

Jun 20, 2013 05:03 UTC

Fear of Fed: Where to hide in Asia?

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By Andy Mukherjee

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

The end of the cheap-cash era may not be good news for Asian equities, but it need not lead to an across-the-board stampede. The end of the U.S. Federal Reserve’s bond-buying programme has triggered fears of a liquidity drought. However, not all markets are equally vulnerable.

Jun 18, 2013 13:29 UTC

G8 shouldn’t just act on tax – it should preach

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By Viktoria Dendrinou

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

The G8 is likely to take some action on corporate tax avoidance. But action by the leading rich nations isn’t enough. They need to preach.

Jun 18, 2013 08:53 UTC

Indonesia subsidy cut is right plan for wrong time

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By Andy Mukherjee

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

Indonesia’s overhaul of energy subsidies is the right plan, but its timing is highly suspect. Hiking state-controlled diesel and gasoline prices by 22 and 44 percent, respectively, will lift prices when investors are already jumpy: $4.7 billion in financial capital left the country in the last quarter. To prevent higher inflation from spooking investors further, the central bank will have to raise interest rates. That means sacrificing GDP growth.

Jun 17, 2013 14:39 UTC

Iranians put hopes for change in pragmatic insider

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By Una Galani

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

Iranians have voted for an end to the conservative status quo. The surprise victory of Hassan Rohani, the sole moderate candidate, in the presidential race has shown the level of public discontent with the Islamic Republic’s hardliners, whose voices silenced others in the last few years. The high turnout also returns legitimacy to the electoral process after the rigged vote of 2009. Iran’s complex power structure means that radical shifts at home or abroad are unlikely. But the mood in Tehran has shifted.

Jun 17, 2013 07:57 UTC

Singapore’s creative bank penalty may be a one-off

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By Peter Thal Larsen

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

Singapore has come up with a creative way of penalising rate-rigging banks. Regulators are forcing lenders implicated in manipulating the city-state’s borrowing and currency rates to set aside up to S$12 billion ($9.6 billion) in extra central bank reserves. With rates low, however, the costs will be much lower than recent mega-fines.

Jun 13, 2013 09:31 UTC

Market jitters could crush Japan’s inflation drive

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By Andy Mukherjee

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

Skittish markets are a threat to Japan’s anti-deflation drive. The rising yen, falling stocks and lower government bond yields suggest investors once again view Japan as a safe haven. The Bank of Japan may need to be bolder to prevent their expectations from becoming self-fulfilling.

Jun 11, 2013 09:16 UTC

SoftBank’s bump for Sprint isn’t a knock-out

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By Peter Thal Larsen

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

SoftBank’s raised bid for Sprint Nextel is no knock-out blow. The Japanese group has tweaked its offer for a controlling stake in the U.S. telco to give the target’s shareholders more value. But Sprint shareholders would retain a stake in a Sprint that has more debt than first envisaged. That erodes SoftBank’s key advantage as it seeks to combat a rival bid from leveraged counterbidder Dish Network.

Jun 10, 2013 08:24 UTC

How Huawei can dial down the fear factor

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By John Foley

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

How scary is Huawei? The Chinese telecom equipment maker has met resistance from politicians who fear it could be used as a Trojan horse by the Chinese government. Most recently a group of UK parliamentarians complained the group supplied critical infrastructure without ministers’ knowledge; American and Australian politicians have already blocked Huawei from key contracts. The political tribulations will take years to resolve, but there are ways to dial down the fear.