John's Feed
Feb 6, 2013
via Breakingviews

Dividend reform won’t fix China SOE money-go-round

Photo

By John Foley

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

China’s elaborate money-go-round starts and ends with its cash-hoarding state-owned enterprises. So a plan to make them pay bigger dividends sounds promising. Still, if the goal is to return cash to the people, there is a long way to go.

Feb 1, 2013
via Breakingviews

Profit first casualty in China’s mobile ad war

Photo

By John Foley

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

China’s online giants are tooling for the mobile ad wars, and profit will be the first casualty. Of 560 million web users, three-quarters are already using smartphones, threatening massive disruption for companies who depend on online advertising revenue. Baidu, the dominant search provider that reports earnings on Feb. 4, has most to prove, and most to lose.

Jan 31, 2013
via Breakingviews

Japan helps Nomura put a bad year behind it

Photo

By John Foley

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

Who wants to be a global investment bank anyway? Not Nomura. The Japanese financial group delivered a solid quarter-on-quarter boost in underlying pre-tax profit in the final three months of 2012, driven largely by a recovery in its home market. Last year’s insider trading scandal and subsequent resignations punctured the global dreams Nomura was pursuing when it bought parts of bankrupt Lehman Brothers in 2008. For investors, that may be no bad thing.

Jan 25, 2013
via Breakingviews

TPG runs rings around Li Ning shareholders

Photo

By John Foley

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

TPG is running rings around shareholders in Li Ning. The buyout firm has renegotiated the terms of a convertible bond it bought from the Chinese sports brand a year ago, and agreed to underwrite a deeply discounted capital raising. The deal leaves other investors in second place.

Jan 23, 2013
via Breakingviews

China’s bail-in bonds leave room for conflict

Photo

By John Foley

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

When China’s banks make a mess, the government usually pays the clean-up bill. But Industrial and Commercial Bank of China’s plan to issue $9.6 billion of so-called “bail-in bonds” suggests the costs of the next crisis will be spread more widely. For investors, there’s room for confusion and conflict.

Jan 21, 2013
via Breakingviews

Caterpillar’s Chinese lesson: dig below top line

Photo

By John Foley

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

As a company that makes excavators, Caterpillar should know the importance of digging. The U.S. machine maker has taken a $580 million write-down on a Chinese mining equipment producer it bought less than a year ago, erasing three quarters of that deal’s value. The accounting fraud that Caterpillar claims to have found at ERA Mining may not have been visible at the time of the purchase. But the low quality of its target’s rapid growth was.

Jan 18, 2013
via Breakingviews

China’s role in Rio Tinto chief’s downfall

Photo

By John Foley

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

Rio Tinto’s $38 billion purchase of aluminium producer Alcan has cost the company billions of dollars in write-downs, leading chief executive Tom Albanese to fall on his sword. But it’s not all Albanese’s fault. Rio’s biggest customer, China, shares some of the blame.

Jan 14, 2013
via Breakingviews

Shifting trade winds catch Li & Fung off-guard

Photo

By John Foley

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

Once upon a time, manufacturing was relatively simple: China produced and America bought. That’s changing, and supply chain companies like Hong Kong-listed Li & Fung are doing their best to adapt. A Jan. 11 profit warning that wiped the equivalent of $2.2 billion from the company’s valuation shows there’s plenty of room for error.

Jan 8, 2013
via Breakingviews

CDB highlights China’s dysfunctional finance

By John Foley

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

China Development Bank is on a roll. The policy lender raised 1.2 trillion yuan ($193 billion) in net domestic funds in 2012, according to Reuters data. The proceeds funded high-profile foreign takeovers, allowed U.S.-listed Chinese companies to go private, and helped Indian billionaire Anil Ambani refinance bonds. Such activities have less to do with development than with China’s financial dysfunction.

Dec 28, 2012
via Breakingviews

China’s hukou belongs on history’s scrapheap

Photo

By John Foley

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

China’s future lies in building bigger, better cities – then giving everyone a fair chance to live in them. For over 50 years the “hukou” system of household registration has prevented free movement, and controlled where and how people live. This inhumane system is changing, but too slowly. It belongs on history’s scrapheap.