Japan needs more than apologies on insider trades
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Handing responsibility for the sale of a $6 billion stake in Japan Tobacco to Nomura Holdings’ rivals after the bank apologized for leaking earlier share sales seemed like a rebuke from Japan’s government. But Nomura probably lost fair and square. Either way, though, Tokyo needs to make such leaks illegal and attempts to profit on them much more painful.
Japan’s retiree raid augurs political paralysis
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Japanese Prime Minister Yoshihiko Noda has wrangled a deal with the opposition to double the consumption tax and whittle down government debt, which is already double GDP. On paper, it’s a good start. In Japan’s toxic political environment, though, it’s a big risk. Because the tax hike will hit the country’s growing population of retired voters, the bill’s passage – or indeed failure – could wind up costing Noda his job. That would derail other reforms needed to avoid a sovereign debt crisis.
Five ways to hedge against a China slowdown
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
It’s no surprise Hu Jintao, China’s president, wants to talk up his economy. He spoke about continuing robust growth over the weekend as he headed for the G20 summit in Mexico. But the latest data showing city house prices down 1.5 percent, along with tumbling industrial production, suggest a slowdown.
Bond market misses Korea’s youthful monetary tilt
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Bond buyers in South Korea are ignoring the youthful tilt in the country’s monetary policy. In Seoul these days, policymakers are more concerned with younger citizens’ job prospects than with GDP growth. As long as unemployment keeps falling, the Bank of Korea may well leave rates alone.
Indonesia rediscovers the Faustian bargain of FDI
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Indonesia is rediscovering the Faustian bargain that is foreign direct investment. Record FDI represents a big vote of confidence, but it doesn’t give policymakers carte blanche. The more money foreign investors put at stake, the more they worry over the kind of policy wobbles emanating from Jakarta. Their anxiety is punishing Indonesia’s currency, turning fickle policy into a problem for the central bank.
Liquidity fears trump sense in Asia’s markets
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Liquidity concerns have trumped financial sense in Asia’s markets. Investors fretting about a euro breakup are diversifying into larger, more liquid bond markets like Australia’s. But it is hot money and it could burn investors when the story changes. Higher-yield bonds from say, the Philippines, might be a better bet.
Asia offers Myanmar development do’s and don’ts
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Myanmar could be a development success story, or a disaster. Aung San Suu Kyi, newly inaugurated into the country’s parliament, warned on June 1 that optimism in its prospects should be balanced by “healthy skepticism”. But 50 years in isolation at least mean Myanmar has a chance to learn from its neighbours’ mistakes. From corruption to currency, it can get right what other Asian nations got so wrong.
Lady Gaga not the only one turned off by Indonesia
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Lady Gaga isn’t the only foreigner giving Indonesia a miss. The controversial pop diva nixed a planned show in the country after protests by conservatives and demands she tone down her act. Investors are selling Indonesian stocks, and the country’s currency, amid concerns over demands that foreigners cede some control of over mines and banks. Indonesia’s new assertiveness may be backfiring.
BREAKINGVIEWS: Indian oil producers may be due a windfall
By Wayne Arnold
HONG KONG (Reuters Breakingviews) – India’s oil producers could be due a windfall. The government subsidises its refiners to sell fuel to the public below cost, and forces state-owned drillers to foot part of the bill. Growing deficits make that unsustainable. Letting prices of fuel rise – and diesel in particular – would mean a boost for the likes of Oil and Natural Gas Corp (ONGC) and Oil India.
Subsidies cost the government the equivalent of 2.4 percent of GDP, according to Citigroup, and have helped drive government debt to nearly 70 percent of GDP. That high debt level is beginning to be a problem. Standard & Poor’s has threatened to lower India’s credit rating and the rupee is near record lows.
Trafigura move tests Singapore’s fat-cat fatigue
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Trafigura’s move to Singapore could test Singapore’s fat-cat fatigue. The commodities trader is moving its HQ from Geneva to Singapore, where its CFO Pierre Lorinet will join Facebook founder Eduardo Saverin and a stream of bankers drawn by its low taxes and proximity to growing Asian markets. But a warm welcome may depend on new arrivals’ ability to create local jobs.
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