Why India Is A Better Investment Bet Than China

OCT 26, 2016 @ 08:14 PM 5,942 VIEWS

Forbes

Panos Mourdoukoutas ,   CONTRIBUTOR,
"I cover global markets, business and investment strategy  "

Opinions expressed by Forbes Contributors are their own.

China may be the world’s largest emerging economy, beating India in many economic and financial indicators. But India is beating China in an indicator that matters the most to emerging market investing: financial market development. This means that India is less prone to a financial crisis than China, and therefore, a better investment than China.

China Gets Desperate About Debt

OCT 26, 2016 5:00 PM EDT

By Christopher Balding

Bloomberg

With its debts surging and growth sluggish, China has hit on a new strategy to revitalize its ailing economy. It’s the same as the old strategy. Only this time, it won’t work.

Earlier this month, China’s State Council released guidelines for a new swap program, in which companies can exchange troubled debt with banks in return for equity. The government hopes this will give the firms a chance to restructure on favorable terms, and avoid the prospect of “zombie companies” propped up indefinitely by state-owned lenders.

Euro zone lending growth levels off, keeps ECB on toes

Thu Oct 27, 2016 | 4:46am EDT

Reuters

Growth in loans to euro zone companies and households is leveling off, European Central bank data showed on Thursday, keeping the pressure on the ECB to maintain its aggressive stimulus policy for months to come.

Lending to companies grew by 1.9 percent year-on-year in September while household loans rose by 1.8 percent, keeping the steady but slow pace seen since the start of the summer

The threat from Russia

How to contain Vladimir Putin’s deadly, dysfunctional empire
Oct 22nd 2016

The Economist

FOUR years ago Mitt Romney, then a Republican candidate, said that Russia was America’s “number-one geopolitical foe”. Barack Obama, among others, mocked this hilarious gaffe: “The 1980s are now calling to ask for their foreign policy back, because the cold war’s been over for 20 years,” scoffed the president. How times change. With Russia hacking the American election, presiding over mass slaughter in Syria, annexing Crimea and talking casually about using nuclear weapons, Mr Romney’s view has become conventional wisdom. Almost the only American to dissent from it is today’s Republican nominee, Donald Trump.

China Deal Watch

Bloomberg
(for full article with interactive plots see http://www.bloomberg.com/graphics/2016-china-deals/)


Chinese companies are buying up overseas assets at a faster pace than U.S. buyers for the first time on record. This graphic, updated weekly, takes a close look at what China is acquiring, and where. The numbers reveal a lot about the country’s growing global ambitions.

On Oct. 18, China Life Insurance Co Ltd agreed to buy select-service hotel portfolio from Starwood Capital Group LLC for $2 billion. Here’s how this deal compares to China’s other overseas acquisitions:
Rank 17th largest foreign acquisition by a Chinese company this year
2016 Total $206.6B in foreign mergers and acquisitions
Growth 212% increase from the same period in 2015

Brexit Bulletin: Bankers Threaten Exodus

Bankers threaten early exodus, while PM May tries to head off a constitutional crisis

Bloomberg

Emma Ross-Thomas

Banks will start moving operations out of the U.K. late this year and early next as they anticipate a hard Brexit. That's according to  Anthony Browne, chief executive officer of the banking lobby group BBA, writing in the Observer newspaper on Sunday.

International banks’ “hands are quivering over the relocate button,” he wrote. “Many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year.”
Without identifying any banks by name, he said lenders can’t wait until the last minute and have to “plan for the worst,” especially because “public and political debate at the moment is taking us in the wrong direction.”
Handily, some real estate companies are already finding them new digs.  A property company managed by Schroders Plc is bidding for an office building in Frankfurt, joining CBRE Global Investors LLC and Standard Life Plc, which are seeking to purchase office space in cities from Dublin to Amsterdam.

Saudi Arabia to Offer International Investors $17.5 Billion in Bonds

Gulf countries are increasingly raising funds through international markets

The Wall Street Journal

By NICOLAS PARASIE and  CHRISTOPHER WHITTALL
Oct. 19, 2016 7:27 a.m. ET
0 COMMENTS
DUBAI—Saudi Arabia plans to raise up to $17.5 billion by selling bonds for the first time to international investors this week, two people aware of the transaction said Wednesday.

The kingdom also tightened its pricing guidance for the potential multi-tranche issue, which along with the estimated issue size reflects a strong appetite for the potential issue, bankers say.

For the five-year tranche, Saudi Arabia said it would pay around 140 basis points above U.S. Treasurys, compared with an initial guidance of around 160 basis points above U.S. Treasurys.

Global Economy Week Ahead: China GDP, U.S. Industrial Production, ECB Meeting

Inflation data are due from the U.K. and the U.S., as well as retail sales from China

The Wall Street Journal

By WSJ STAFF
Oct. 16, 2016 3:00 p.m. ET
1 COMMENTS
The week’s economic calendar provides insight into how the world’s two largest economies are faring. It kicks off with a gauge of U.S. industrial activity, followed by a round of economic data out of China. From Europe comes a report on consumer confidence and a policy decision from the European Central Bank.

Greece’s Least Wanted Man Lives in Maryland

Andreas Georgiou fixed the country’s fake stats, now he faces criminal charges.
 Robert Schmidt
  Bloomberg Businessweek

For 21 years, Andreas Georgiou worked in relative obscurity as an economist at the International Monetary Fund in Washington. When the European debt crisis hit and his home country of Greece began teetering toward bankruptcy, Georgiou felt a patriotic urge to help. In early 2010 he applied online to run a newly created office designed to clean up Greece’s much maligned economic statistics. He got the job, and in August 2010 he moved to Greece for a five-year term as president of the Hellenic Statistical Authority.

Economic imbalances risk 'destabilising' euro zone: ECB's Draghi

Mon Sep 26, 2016 | 5:11pm EDT

Reuters

Economic imbalances within the euro zone risk destabilising the currency bloc, top European Central Bank officials said on Monday, stressing the responsibility of governments to help boost growth while respecting EU rules.

ECB President Mario Draghi and board member Benoit Coeure also acknowledged the limitations of the ECB's ultra-expansionary policy of low interest rates and money printing.

"In our Economic and Monetary Union, in particular, the economic governance framework is essential to avoid imbalances that would eventually risk destabilising the euro area," Draghi told a European parliamentary committee in Brussels.

The Deutsche Bank crisis could take Angela Merkel down – and the Euro

MATTHEW LYNN
Matthew Lynn 26 SEPTEMBER 2016 • 4:43PM

The Telegraph

here are some words that make such an unlikely pairing that we find it hard to put them together.  Italy and efficiency, for example. Or Bake Off and Channel 4. And ‘Germany’ and ‘banking crisis’ is another one. Our image of German banks, and the German economy, as completely rock solid is so strong that it takes a lot to persuade us they might be in trouble.

And yet it has become increasingly hard to ignore the slow-motion car crash that is Deutsche Bank, or to avoid the conclusion that something very nasty is developing at what was once seen as Europe’s strongest financial institution. Its shares have been in free-fall for a year, touching a new low of 10.7 euros on Monday, down from 27 euros a year ago. Over the weekend, the German Chancellor Angela Merkel waded into the mess, briefing that there could be no government bail-out of the bank.

COSCO sees Greece's Piraeus among world's top 30 ports by 2018

Thu Sep 22, 2016 | 2:10pm EDT

Reuters

By Angeliki Koutantou | ATHENS
China's biggest shipping company, COSCO Shipping, plans to ramp up container volume at Greece's biggest port in Piraeus by 35 percent by 2018, the port's new managing director, Fu Cheng Qiu, told Reuters on Thursday.

COSCO Shipping, which owns the world's fourth-largest container shipping fleet, bought 51 percent of the port's operating company last month for 280.5 million euros ($315.5 million), one of Greece's biggest and most strategic privatizations since a debt crisis began in 2009.

Why Euro Looks Stuck Even as Fed Gears Up to Move

On a trade-weighted basis, the euro has actually risen since quantitative easing started in 2015
The Wall Street Journal

By RICHARD BARLEY
Aug. 30, 2016 7:36 a.m. ET
3 COMMENTS
Once upon a time, signs the Federal Reserve was gearing up to increase rates would have been big news for the euro. Policy divergence was a key focus for foreign-exchange traders. But times have changed.

True, the euro declined against the dollar in the wake of the Jackson Hole conference, but it was far from an extraordinary move. And the bigger picture is that at $1.117, the single currency is in the middle of a relatively narrow range that has held since February.

This economist thinks China is headed for a 1929-style depression

Published: June 30, 2016 2:23 p.m. ET

MarketWatch

Andy Xie is among the loudest voices warning of an inevitable implosion

By SUE CHANG
MARKETS REPORTER

Andy Xie isn’t known for tepid opinions.

The provocative Xie, who was a top economist at the World Bank and Morgan Stanley, found notoriety a decade ago when he left the Wall Street bank after a controversial internal report went public. Today, he is among the loudest voices warning of an inevitable implosion in China, the world’s second-largest economy.

Xie, now working independently and based in Shanghai, says the coming collapse won’t be like the Asian currency crisis of 1997 or the U.S. financial meltdown of 2008.

World stocks, sterling fight back after Brexit beating

Tue Jun 28, 2016 5:11am EDT Related: HOUSING MARKET, DAVOS
LONDON | BY MARC JONES
Reuters

World stocks rose for the first time in three days and sterling and the euro climbed on Tuesday, as investors made a rush for Brexit-bashed assets hammered by some of the biggest falls since the 2008 collapse of Lehman Brothers.

Bargain hunting trumped still widespread uncertainty over Britain's vote to leave the European Union, as the bloc's leaders, including soon-to-be-ex UK Prime Minister David Cameron, headed for their first post-vote meeting in Brussels.

European shares .FTEU3 jumped 2.4 percent in early trading having plunged over 10 percent since Friday.

Forecast Bright for Greek Tourism, Despite Refugee Crisis

Voice of America
http://www.voanews.com/content/greece-tourism/3332701.html

Margaret Besheer
May 16, 2016 3:10 PM

Despite the ongoing migrant and refugee crisis, Greece expects to welcome a record 27 million tourists this year.

“I think it’s an achievement given the fact that we have capital controls, we still have the refugee and migration crisis - which make tourists think twice if they want to visit Lesbos or some other places that are migration hubs,” the government’s top spokesperson Lefteris Kretsos told reporters on Monday.

“Greece is a brand name in tourism. It was always, and I think it will always be,” he added.

Like the US, China wants a national electricity grid. Unlike the US, China’s just building it.

Vox
http://www.vox.com/2016/3/30/11332900/china-long-distance-transmission
Updated by David Roberts on March 30, 2016, 3:00 p.m. ET

Wind and sunlight are often concentrated in sparsely populated, remote areas. Getting wind and solar power to the population centers where it's needed involves building long-distance power lines. Lots of them.

Earlier this week I wrote about a new long-distance power line in the US and the long, slow path it took to win approval. It was proposed in 2009; construction is expected to begin next year and finish in 2020. Like everything involving electricity in the US, it had to navigate a skein of overlapping jurisdictions, multiple state and local authorities, and federal rules. Every landowner and stakeholder had their say.

So I chuckled when I ran across this Reuters headline yesterday: "China pushes for mandatory integration of renewable power." That's the other way to do it!

China Weighs Letting Banks Sell Bad Debt to Investors

By CHRIS BUCKLEYMARCH 12, 2016

The New York Times


BEIJING — China is exploring a new way to grapple with its mounting pile of bad corporate debt, though its top central banker sought on Saturday to dispel worries that the plan would simply shift the burden to other parts of the country’s vast economy.

Under the tentative proposal, Chinese officials would allow banks saddled with growing quantities of bad loans to sell that debt to investors, said Zhou Xiaochuan, the governor of the People’s Bank of China. The goal is to help alleviate one of the major drags on China’s economy, the world’s second largest after the United States’ and a major driver of global growth.

But Mr. Zhou and a deputy central bank governor, Pan Gongsheng, said they would take steps to make sure the effort did not create the kind of risk-laden financial products that played a major role in the 2008 global financial crisis. The effort would be modest, regulators would monitor it closely, and mom-and-pop investors would be kept out, they said.

“There’s no need to exaggerate,” Mr. Zhou said at a news conference held as part of China’s annual legislative session in Beijing. “There’s not certainty that this would be a very big market.”

China’s Outflows of Money Slowed in February

By KEITH BRADSHERMARCH 7, 2016

The New York Times

HONG KONG — Few economic statistics have gone as quickly from obscurity to the center of attention from international financial markets lately as China’s foreign currency reserves, widely seen as the best barometer of how long China can avoid a possible devaluation someday of its own currency.

Monthly changes in the reserves these days mainly reflect how much money is being sent out of the country by Chinese companies and families nervous about the country’s economic slowdown and sweeping anticorruption investigations. Over the last five weeks, the Chinese government has waged an aggressive campaign to stem the outflow, through almost daily pledges by officials not to devalue and through much tighter enforcement of the rules on sending money overseas.

Forget fracking. Choking and lifting are latest efforts to stem U.S. shale bust

Thu Mar 10, 2016 2:32am EST Related: GLOBAL ENERGY NEWS
BY SWETHA GOPINATH AND AMRUTHA GAYATHRI

Reuters

Something is awry in the beleaguered U.S. shale patch: older wells, which normally gush oil or natural gas in their first few months before rapidly depleting, are not petering out as quickly as they should.

When oil prices began falling a year and a half ago in the deepest rout in a generation, many analysts expected U.S. crude production, especially from fracking in the new shale plays that contributed to a global supply glut, to follow quickly.