Breakingviews

Mitsubishi Motors fiasco shows reforms lack oomph

May 5, 2016

The carmaker’s legacy of dodgy testing is astonishing. At best, management and directors were in the dark for 25 years. The firm badly needs a stronger board and better internal controls. For all the talk of improved corporate governance, much of Japan Inc is similarly lacking.

UK deal veto would be big setback for Li Ka-shing

May 4, 2016

A $15 bln takeover of Telefonica’s O2 unit was key to making the Hong Kong tycoon’s costly bet on European telecoms pay off. If CK Hutchison cannot overturn a likely EU veto, his UK telco will either have to carry on as a disruptive fourth player, or find a fallback deal.

Baidu shows health is a huge flashpoint in China

May 3, 2016

A dying student accused the search giant of promoting false medical information. The ensuing probe has cut $5 bln from Baidu’s market value: a big move but not an overreaction. Health scandals are highly sensitive and authorities pay close attention to outbursts of online anger.

Chinese banks’ stealth clean-up fools nobody

April 29, 2016

Top lenders like ICBC and BOC are piling up bad loans yet still reporting flat earnings. Pliable regulators are cutting them extra slack. Investors did not trust the banks’ balance sheets anyway. The latest sleight of hand will only fuel their scepticism.

Bank of Japan goes from activist to bystander

April 28, 2016

The world’s most aggressive central bank has wrong-footed investors by holding policy steady even as the backdrop weakens. There are reasons to hold back: a previous push into negative rates is still bedding down, for example. But markets could have been let down more gently.

Jack Ma’s jewel is a $20 bln mystery for Alibaba

April 27, 2016

The e-commerce group’s financial affiliate is now valued at $60 bln. Alibaba has an option to take a 33 pct stake, or extend a profit-sharing agreement between the two. Yet their future relationship is clouded by regulatory uncertainty. Alibaba’s shareholders are in the dark.

Mitsubishi Motors’ VW-style crash is justified

April 26, 2016

The Japanese carmaker’s value has dropped by $3.4 bln since it admitted fiddling test data. Though uncertainties abound, that reaction doesn’t look excessive. If its cash pile halves, EBITDA drops by a quarter and already-low valuation multiples shrink, the decline is deserved.

Bank of Japan’s boldness risks diminishing returns

April 25, 2016

Inflation and growth remain moribund despite epic bond-buying and subzero interest rates. One bold move would be for the central bank to step up purchases of exchange-traded funds. That would lift shares and maybe help confidence - but wouldn’t change corporate behaviour much.

Review: A short tour of Jack Ma’s virtual mansion

April 22, 2016

An insider’s account provides fresh insights into the origins of China’s most successful entrepreneur. Yet the tale of Ma’s rise reveals little about the inner workings of his e-commerce empire. Outsiders are no closer to disentangling Alibaba’s future from its founder.

Japan Inc would gain by fixing M&A sights on home

April 20, 2016

Bosses have been busy buying abroad. But often it makes more sense to consolidate fragmented domestic industries. With Japanese firms under pressure to become better-run and more profitable, a recent string of tie-ups could signal the start of a more investor-friendly deal spree.