Wayne's Feed
Apr 16, 2012

BREAKINGVIEWS: Infosys U.S. woes tarnish India’s star sector

By Wayne Arnold and Jeff Glekin

HONG KONG/MUMBAI (Reuters Breakingviews) – Infosys’ legal troubles in the United States may complicate life for India’s feted outsourcing industry. Outsourcers have been a relative bright spot in a market dogged by worries about India’s growth prospects. But an investigation into allegations Infosys broke visa rules to get Indian employees into the United States will put them on eggshells. Until the air clears, this is another reason to avoid Indian stocks.

Indian outsourcers have been a shelter of sorts for investors, offering a way to play the India theme without the worries about domestic growth and political paralysis. They had a recession-proof appeal: companies eager to cut costs in good times would be more desperate to do so in bad times. As a result, Infosys shares had fallen only 8 percent in 2012 up to April 13, while market heavyweight Reliance Industries had slid 26 percent.

Apr 16, 2012

Infosys U.S. woes tarnish India’s star sector

By Wayne Arnold and Jeff Glekin

HONG KONG/MUMBAI, April 16 (Reuters Breakingviews)
-Outsourcing was a bright spot amid worries about India’s growth
prospects. But an investigation into alleged visa violations by
Infosys could herald a tougher time for the industry. Until the
IT group’s papers are in order, investors have another reason to
shun Indian stocks.

Full view will be published shortly.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS:

www.breakingviews.com/TOPNewsSubscription

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

CONTEXT NEWS

– Infosys shares slid 13 percent on April 13 after the
company forecast slower-than-expected revenue growth in its
current fiscal year. The technology and outsourcing company
reported a 27 percent increase in fourth quarter net profits, to
23 billion rupees ($449 million). But it said it expected
revenues in the year ending March 31, 2013, to grow between 8
percent and 10 percent to as much as $7.7 billion.

Apr 10, 2012
via Breakingviews

China’s positive data hides healthy economic pain

Photo

By Wayne Arnold

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

There’s pain lurking behind China’s latest feel-good economic headlines. Although the monthly consumer inflation rate was surprisingly high, producer prices are falling. A monthly $5.35 billion trade surplus hides a decline in export growth rates. If the authorities in China considered rapid GDP growth the highest economic good, such signs of relative economic weakness might encourage them to introduce monetary and fiscal stimuli. But the reformers taking the reins in Beijing may be content to let the economy suffer short-term pain for the sake of longer-term gains.

Mar 30, 2012
via Breakingviews

Sweat-free iPads come at a price worth paying

Photo

By Wayne Arnold

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

Apple scores points for pushing to improve conditions for workers in China churning out its iPhones and iPads. But change was inevitable. Yes, Apple commissioned the probe of Foxconn. But the problems uncovered at the Taiwanese company’s factories in mainland China were already well-publicised. Apple may have also jumped before it was pushed. It should now sidestep any crackdown on abuse by Beijing by prompting Foxconn – at long last – to comply with China’s labour laws.

Mar 29, 2012
via Breakingviews

Taiwanese money can’t save Japan from Samsung

Photo

By Wayne Arnold

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

Taiwanese money can’t save Sharp from Korea’s Samsung. Foxconn’s $1.6 billion investment buys Japan’s electronics company time. The deal gives Sharp cash and the promise of wider sales too, but does nothing to reduce a global glut in flat-panel screens. Like Sony, Panasonic and Toshiba, Sharp has for too long insisted on fighting for cutthroat markets where it’s no longer competitive. As Hitachi has shown, withdrawal may be the best option.

Mar 27, 2012

BREAKINGVIEWS: India’s policy paralysis sours outlook for stocks

By Wayne Arnold

HONG KONG (Reuters Breakingviews) – The outlook for Indian stocks is poor. Foreign investors have poured $8.9 billion into the country’s shares so far this year, helping to push up the BSE Sensex by more than 11 percent. But India’s dimming growth prospects don’t justify the optimism.

The problem is policy paralysis: heavy debts and political squabbles are keeping Delhi from doing more to remove supply bottlenecks, while rising food and oil prices are preventing the central bank from cutting rates.

Mar 27, 2012

India’s policy paralysis sours outlook for stocks

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

By Wayne Arnold

HONG KONG, March 27 (Reuters Breakingviews) – The outlook
for Indian stocks is poor. Foreign investors have poured $8.9
billion into the country’s shares so far this year, helping to
push up the benchmark stock index in Mumbai by more than 11
percent. But India’s dimming growth prospects don’t justify the
optimism.

Mar 8, 2012
via Breakingviews

Indonesia’s mining asset-grab overplays its hand

Photo

By Wayne Arnold

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

Indonesia is overplaying its hand with foreign investors. A decree forcing foreign miners to cut their stakes in projects below 50 percent demonstrates a worrying disregard for overseas capital. Indonesia’s finances are robust, but ongoing fuel supply issues, caused by a lack of energy investment, show it can’t afford to play too rough.

Mar 7, 2012
via Breakingviews

Japan quake anniversary shows lessons unlearned

Photo

By Wayne Arnold

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

Japan’s remarkable recovery from last year’s tragic earthquake leaves big lessons unlearned. The economy bounced back more quickly than expected after March’s earthquake, tsunami and resulting nuclear leak. But the government flunked a bigger test by failing to push through painful reforms. Now Japan is a year older, deeper in debt and facing the same economic downward spiral it was in before the catastrophe.

Feb 20, 2012
via Breakingviews

Five phases of China hard-landing denial

Photo

By Wayne Arnold

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

China watchers are in denial over the likelihood of a property crash. While politicians openly worry about China’s too-expensive houses, economists polled by Reuters in January still think 2012’s GDP will grow by 8.3 percent. That’s too optimistic. Here are the frequently heard examples of wishful thinking.

    • About Wayne

      "Wayne Arnold is Breakingviews’ Hong Kong based Asia strategist, with 20 years of experience in the region. From 1999 to 2008, he served as the Southeast Asia business and finance correspondent for The New York Times and the International Herald Tribune. In 2008 he helped launch a new daily newspaper in Abu Dhabi, The National, where as its economics columnist, he chronicled Dubai’s financial meltdown. He was previously a columnist and reporter at the Wall Street Journal in Hong Kong and Bloomberg in Tokyo. His stories have spanned from Japan’s financial collapse in 1991 to the global economic crisis. ..."
    • Follow Wayne