John's Feed
Mar 4, 2013

Breakingviews:China’s gains tax won’t put a roof on house prices

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

By John Foley

BEIJING, March 4 (Reuters Breakingviews) – China’s house
prices are too high and local tax revenue too low. What better
way to address both problems than taxing capital gains on
property? China’s cabinet has promised to enforce such a levy on
homeowners. While that drove down the share prices of property
developers, it is unlikely to do the same for real estate
values.

Feb 27, 2013
via Breakingviews

Illumination alone won’t slow China shadow banks

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By John Foley

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

When it comes to China’s shadow banks, switching on the lights isn’t enough to make the risks go away. The country’s lenders may soon be asked to disclose their off-balance sheet lending activities, starting with a trial in Shanghai, according to the Financial Times.

Feb 20, 2013
via Breakingviews

China’s next debt crisis will be a local affair

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By John Foley

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

China’s next credit crisis may be a local affair. A recent suggestion of setting up local bailout funds reflects the fact that it’s no longer big banks that present the biggest risks, but towns and regions. The elaborate ties between local borrowers, lenders and governments could make future credit problems both chaotic – and concentrated.

Feb 6, 2013
via Breakingviews

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

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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

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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

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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

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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

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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

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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

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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.