August, 2018

• 27 August

  China’s tech growth is getting more expensive

  

  China’s consumer growth is a key plank underpinning the investment thesis for many of the country’s big technology companies. But the torrent of revenue from domestic customers is getting expe- nsive, forcing the likes of Tencent Holdings Ltd, Alibaba Group Holding Ltd and Sina Corp to pony up more cash just to keep the numbers humming along at the accustomed ...

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• 27 August

  Four Fed hikes isn’t set in stone

  

  Remarks by Fed officials at the symposium in Jackson Hole, Wyoming, confirmed the consensus market expectation that the US central bank will hike interest rates two more times this year, delivering the biggest annual tightening in more than a decade. The increases would be carried out even as the Fed is reducing the size of its $4 trillion balance sheets. ...

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• 27 August

  China’s deposit-hungry banks are getting fancy

  China’s banks have a deposit problem. For those outside the so-called Big Four lenders, there’s just not enough to go around. It’s not an issue for the biggest. Industrial & Commercial Bank of China Ltd, Bank of China Ltd, China Construction Bank Corp and Agricultural Bank of China Ltd all share one thing: sticky, low-cost retail deposits. Move down the ...

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• 27 August

  Switzerland, land of the elegant corporate U-turn

  To Switzerland, and a beautifully engineered corporate U-turn. Zurich-based industrial group ABB Ltd. is considering a sale of its power grids business, according to Bloomberg News. The deliberations come nearly two years after CEO Ulrich Spiesshofer ardently rejected calls from activist Cevian Capital AB for the unit be separated. Perhaps he realises the justifications for keeping it are dwindling. The ...

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• 27 August

  The contradictions of Trump’s coal fixation

  

  There is a curiously retro aspect to the energy policies of the Trump administration, with its embrace of resource nationalism and love of extraction over efficiency. Coal, so redolent of the age of Bismarck, is its touchstone. And while the latest attempt to make coal competitive again, the Affordable Clean Energy proposal, is quite obviously not going to do much ...

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• 27 August

  Games Indian banks play deep into injury time

  

  Corporate banking in India is one of those painful-to-watch soccer games stretching goallessly into injury time. Neither the creditors nor the debtors have the energy to carry on, yet they’re dreading the long whistle: That’s when both sides lose. The match was supposed to end, going by the 180-day deadline the Indian banking referee gave lenders on March 1 to ...

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• 27 August

  US leveraged-loan lovefest will end in heartbreak

  

  Moody’s Investors Service published an in-depth look at US leveraged loans. And it seems the more the analysts dug in, the more alarmed they became. Yes, the nearly $1.4 trillion market can take comfort in a low 3.4 percent default rate that Moody’s projects will only get lower, most likely dropping to 2.2 percent over the next year. But that’s ...

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• 27 August

  Two-cent fares killing airlines in India market

  

  Bloomberg Global carriers have flocked to India, lured by a domestic travel boom and what’s expected to be the world’s third-biggest aviation market by 2025. Yet India has proven an intensely competitive market, where profits are scarce and the life expectancy of weaker airlines is anything but certain. Jet Airways India Ltd., one of the first carriers to launch after ...

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• 27 August

  Toys ‘R’ Us sale of Asia unit caught in ‘feud’

  

  Bloomberg The sale of Toys ‘R’ Us’s last and most valuable remaining asset, its Asia operations, has become caught up in a battle between two groups of hedge funds over the future use of the brand by stores in that region. One group of funds, including Cerberus Capital Management and Cyrus Capital Partners, owns notes issued by the Asian stores ...

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• 27 August

  United loses challenge to food service union drive

  

  Bloomberg A vote on unionisation by 2,700 United Airlines in-flight catering workers can move forward over the company’s objections, the general counsel of the National Mediation Board ruled. The workers, who prepare and transport food for flights, are the only group of front-line United employees who don’t have union representation. In January, the hospitality union Unite Here filed a petition, ...

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