|Posts on Regator:||2423|
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|Archived Since:||June 19, 2011|
The government is freeing up land and loosening planning laws to boost supply and make housing more affordable. But new construction will struggle to keep up with demand. Until interest rates rise or capital flows from China ease, Hong Kong property prices will remain stretched.
At 30 pct of expected 2013 net income, it’s a punchy return to shareholder payouts. GM’s profit is rising, it has plenty of cash to handle its challenges and the timing implies shareholder returns rank ahead of executive pay. Mary Barra is set for a good first day as CEO.
The French president launched a pro-business plan to restore profits and create jobs while cutting public spending. Acknowledging that France needs more supply-side reforms is sound. Whether Hollande has the political strength to implement the new policies is another matter.
Workers in developing economies aren’t cranking up output as much as before. Fading productivity growth will put a brake on wages and consumption, and slow emerging markets’ quest to become less reliant on spenders in rich nations. Investors are right to be pessimistic.
Rob Cox is joined by Kevin Warsh, Tony James and Paul Taubman to discuss what to expect in the year ahead from global markets, economies and corporate finance.
The search giant’s decision to pay $3.2 bln for Nest, a maker of smart thermostats, signals a shift in Silicon Valley’s arc of disruption. Sending data to people on the go looks rather ho-hum next to a future where consumers communicate with and control their products remotely.
Investment banks now want younger workers to spend less time on the job. And they’re also appalled at insider-trading allegations, including a new one on U.S. interest-rate swaps. But such practices won’t stop without an end to the industry’s endorsement of amoral ambition.
For all the concern about smog, China is adding more new coal-mining capacity each year than its total imports. Hopes that coal use is nearing its peak rest on heroic assumptions about clean, slower growth. But history and short-term economics are hard to ignore.
The Breakingviews Abenomics Index rose for a third straight month in November, buoyed by increasing consumer prices and improved household earnings. Equity and bond markets remain hopeful that Prime Minister Shinzo Abe’s war on deflation will move closer to its target in 2014.
The Japanese booze group’s slogan is “Yatte Minahare” or “Go For It.” In finance argot it means Suntory’s willing to pay about 20 times EBITDA for the distiller of Jim Beam, Maker’s Mark and other tipples. It’s a big price which won’t be lost in translation for Diageo or Pernod.
Basel’s softening of its equity-to-assets metrics will help European banks like Deutsche and Barclays, which have big fixed income trading operations. Differences with U.S. regulation are narrowing. The flipside is that a common global measure could in time be raised more easily.
Li Ka-shing’s utility spinoff is luring shareholders with a dividend yield of more than 6 percent. Though the business itself is stable, its debts make earnings vulnerable to higher borrowing costs. Rising rates will also give investors a bigger choice of income-earning assets.
Politicians are already jostling before next year’s general election. On current form, the left-leaning opposition could oust the governing coalition. Any knee-jerk investor dismay may be tempered given the Labour Party is likely to cement Britain’s place in the European Union.
Chinese car dealers had a bumper year in 2013: 85 percent of the rise in global sales came from the mainland. China’s growth may down-shift to 10 percent this year as large cities impose car-buying caps. But even then, it remains by far the world’s most important car market.
In an uncanny replay of the JPMorgan CEO’s Whale fiasco, the New Jersey boss followed his own “tempest in a teapot” moment with a mea culpa for “stupid” behavior. Christie even has an Ina Drew to blame. Like Dimon, the governor needs to own up to a culture he engendered.
A mediocre fourth quarter means Wall Street and City payouts are unlikely to improve on ones from 2012. The trend may hold with industry-wide revenue growth seen tepid at best. The one bright spot is bank share prices. These make deferred pay from previous years more valuable.
Exuberance is inevitable as China ends a year-long moratorium on new listings. Controls mean the market is rigged in favour of investors. But that’s OK. In the long run, China needs a functioning equity market to help efficient companies grow, and reduce its addiction to credit.
Euro zone inflation remains at a worryingly low rate, with some countries at risk of falling into debilitating deflation. The ECB shouldn’t consider only the whole zone. Nor should the central bank let German opposition hold it back. It should act now, before it’s too late.
Recent tinkering looks designed to raise rates in the frothiest parts of the non-bank lending sector. Overstretched, unproductive borrowers will feel the heat most. The question is whether China will let them fail – and whether it can shield good borrowers from the impact.
Despite the real assets buried under the collapsed EBX Group, the flagship oil explorer will emerge from bankruptcy with poor growth prospects. Investors already have priced in big things for the port and electricity arms. And too much depends on a resurgent Brazilian economy.