June 21st, 2011
04:00 AM GMT
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Hong Kong, China (CNN) –- Dot-anything.  The possibilities for your new web address are now practically endless.  And they don’t even need to be in English anymore. That’s because ICANN, the Internet Corporation for Assigned Names and Numbers, voted Monday to relax the rules limiting domain names to the 22 that currently exist.

That means move over .com, .org and .gov.

You’ll be joined by .canon, .unicef and .paris.  These and several other known brands, organizations and cities have already said they’re going to apply.

While big names will be applying for the new web addresses between January and April 2012, I’ll wager you won’t be among them – unless  you have $185,000 to spend on the new domain name application fees (as much as I would like to, I can admit I won’t be applying for .inocencio).


June 17th, 2011
08:38 AM GMT
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(CNN) – From Hong Kong to New York, investors are watching the events unfold in Greece with a dreaded sense of déjà vu.

The reality gap looming in Athens between what ordinary Greeks want and what their politicians can realistically achieve has ramifications that could ripple far beyond the Aegean shores.

The only thing that is certain for now is that the longer the impasse lasts, the more devastating its consequences will be – not just for Greece- but for other cash strapped countries that share the euro as well as Europe’s trading partners further afield.

As the IMF prepares to hand out yet another eye-watering chunk of bailout funds to Greece, it may appear to some like a parent handing cash to a spoiled child - even if they haven’t done their homework.

However the Greeks protesting from the Parthenon to the Parliament this week are not children. They are men and women coping with the most precipitous decline in living standards their generation has known.


June 17th, 2011
04:41 AM GMT
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(CNN) – Small emerging markets may pay off better in the long term than the lofty BRICS.

That’s according to State Street Global Advisors, which reports that smaller emerging market economies outperformed the BRICs by a whopping 39% in the period from 1996 to March, 2011.

Investors focusing only on Brazil, Russia, India and China may be missing out.

Compared with developed economies, the numbers are even more stunning.

For example, when you look at retail sales of licensed merchandise, emerging markets registered a 22.7% increase from 2009 to 2010.

“The Licensing Letter,” an independent trade publication, also reports a 2.2% decline in retail sales of licensed merchandise globally for the same period, and a 4% drop in the United States and Canada.

So while others shrink, the EM’s just keep growing.

Indonesia is just one of the small emerging markets cited in recent small emerging market reports; Its growing consumer class and economic growth have been the focus of special coverage on World Business today all this week.

Check out our coverage to locate the hot-spots.

June 14th, 2011
04:52 AM GMT
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Hong Kong, China (CNN) – Kaching, kaching, kaching!

That’s the sound of billions of dollars being made in Hong Kong.  It’s been echoing across our airwaves over the past twelve months from a series of high-profile IPOs by non-Asian companies. If these companies were moths, the bright allure would be the shimmer of money from mainland China’s nouveau riche.

Luxury-brand IPOs account for a large chunk of the billions recently being made in Hong Kong. Italian fashion house Prada could raise as much as $2.7 billion in its share offering later this month. Luggage maker Samsonite just bagged about $1.25 billion in its share sale last week. Milan Station, a local luxury-bag reseller, aimed to raise just $35 million in its May IPO. Actual requests shot past $7.4 billion. And last year, L’Occitane International’s IPO locked in more than $700 million in France’s first foray onto the Hang Seng, Hong Kong’s benchmark bourse.

As if that weren’t enough, non-luxury brand IPOs accounted for even more of Asia’s shine in the past year. Glencore, the world’s largest clearinghouse for commodities, cranked out about $10 billion in May. AIA and the Agricultural Bank of China together raised $50 billion in their IPOs last year – the latter of which was the largest in history.

All told, these companies will have raised an astounding $64 billion through Hong Kong IPOs in the last twelve months.

But there’s also a $64,000 dollar doubt that’s starting to creep into investor minds. With growing signs that the world economy is slowing down, is the attractive glow of Hong Kong fading with it?


May 27th, 2011
07:11 AM GMT
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Hong Kong, China (CNN) – The property boom in Hong Kong is pricing out small investors. Real estate prices have risen nearly 70% in the past two years. With interest rates at a measly .001%, it seems silly to leave your savings sitting in the bank.  So where can you park your cash?

Some investors are looking to alternative investments like taxi licenses. It doesn't seem very sexy and 25-year old Kin Yin Shek says that's just fine with him. He bought four licenses in January for  HK$3 million each  (US $387,000). Since then, the value of  the licenses has increased about 10%.   It's a matter of limited supply and increased demand. The Hong Kong government has issued 18,138 taxi licenses. Don't count on any more being issued any time soon. The last time that happened was 14 years ago – and only 10 were issued.

Shek says he opted for taxi licenses over buying an apartment because it was "cheaper." In order to buy a taxi license, he made a 20% down payment on a loan. If he had purchased an apartment of the same value, he would have had to put down 30%, pay a large stamp duty and attorney fees.  "It's very hard to get a good tenant, you can get a really bad tenant who doesn't pay,” Shek says. “I don't have much headaches with taxis. They run by themselves. There are eight drivers working for me."


May 17th, 2011
06:38 AM GMT
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(Hong Kong, China) – New numbers out today show April foreign direct investment in China jumped 15.2% year-on-year. While this number might seem acceptable, various industry analysts had forecast the actual number to be more than double that – some expecting as high as about 36% year-on-year growth. 

On a month-to-month basis, China FDI actually fell. Beijing reported a March FDI of just over $12.5 billion. April’s number came in at just under $8.5 billion.

China’s Ministry of Commerce did not elaborate on reasons for the decline.

I spoke with Frederic Neumann, Managing Director and Co-Head of Asian Economic Research at HSBC here in Hong Kong. He told me via e-mail that the lower number is likely just a blip on the radar.

Generally he says, “the (FDI) figures are quite volatile and it's not clear how useful they are. I'd be surprised if there will be much comment at all from various analysts…my own take is that this is more noise.”

Meanwhile, China’s official Xinhua news agency has been highlighting a different time frame, comparing the first four months of this year to the same time range last year.  That gives a higher FDI growth number of 26.03% between the January to April period.

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Filed under: AsiaChinaInvestment

February 10th, 2011
01:12 AM GMT
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New York (CNN) - The floor of the New York Stock Exchange is one of the most recognizable places in the world. It has appeared in countless movies. A host of international networks broadcast live from the exchange every day.

If you watch our air at all you know that well.The thing you don’t see – there isn’t anyone there anymore. Well hardly anyone. The busy bustling floor that I used to go to back in 2001 with papers flying everywhere and traders shouting orders has morphed into a ghostly, tidy scene with only a scattering of traders, eyes glued to their computer screens.

What happened? Technology.


November 15th, 2010
04:59 AM GMT
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Hong Kong, China (CNN) – For the past decade, a small company in Estonia  has struggled to carve out a slice of the rare earth industry dominated by China. Now Silmet Rare Metals suddenly finds itself on the map as a result of recent trade disputes between China, the U.S. and Japan over rare earth minerals.

"We've been trying to get in the door for the past ten years, Suddenly, we're the prettiest girl at the dance," says CEO David O'Brock.

The story of Silmet Rare Metals is an interesting one. Its factory in the port town of Sillamäe, Estonia was originally a uranium enrichment plant for the Soviets during World War II. In the 1970's, the factory buildings were transformed into a rare earth metals and minerals production facility. Today, Silmet purchases raw materials from a Russian mine and then processes out rare earth elements that can be used in the auto, glass and electronics industries.

O'Brock is an American who has lived in Estonia for 12 years and runs the 500-employee company. He says Silmet produces 3,000 tons per year – just a fraction compared to China's 130-140,000 tons per year.

The recent political disputes and China's chokehold on the industry have made many international manufacturers very nervous about their future supplies of rare earth minerals. The situation has put Silmet in the enviable position of being the hottest ticket in town.

Unfortunately, says O'Brock, he can't take full advantage of the demand and has to turn away potential new customers. "We're a very small producer on a world scale. Our bottleneck has always been raw material. Because we don't source from China, we don't have enough capacity for what the world needs," he says.

Silmet is sticking with its longtime, if small, customer base of about 15 companies from the U.S., the EU and Japan. While Silmet cannot take on new accounts, it is taking advantage of surging market prices. O'Brock gives an example of the cheapest raw earth metal: Cerium which is used in the glass industry.

Last year, cerium sold for $3.50 per kilogram. Today Silmet sells it to his customers for $40 a kilogram – a 1000% price increase! Do his customers complain?

"They understand the political situation and the market forces," O'Brock says. In other words, they have no choice.  Silmet is a private company and will not release financial figures. After pressed for some perspective, the CEO acknowledged that Silmet has never made a profit until this year.

Sometimes, a little controversy can be good for business.

September 21st, 2010
04:57 PM GMT
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New York City (CNN) – Twenty-three years ago Oliver Stone introduced us to the notion that greed is good. Or at least that is what his villainous character Gordon Gekko famously told a group of shareholders in “Wall Street.” For the sequel it is “banksters” that Stone shines a bright light on.

“What Gekko was doing in the 1980s became legitimate in the 2000s,” he explains. “The banks became Gekko. The Securities and Exchange Commission did nothing, these buccaneers, these pirates – 'banksters' you could call them - were running rampant, selling junk securities to the world. There is a lack of trust between us and the banking class, we’ll never trust them again.”

Known for his thorough research, Stone and his stars once again immersed themselves in the subject. They spent months talking to Wall Street insiders who explained the complex world of derivatives and credit default swaps. Shia LaBeouf, who stars as the young hero of the movie Jake Moore, even passed his Series 7 exam and is a licensed dealer broker.

Though critical of the actions of banks during the crisis, Stone is not completely anti-Wall Street.

“My father was a stock broker for 50 years,” he says. “ think there is a reason for free markets. Markets do define things, they distribute well. At the end of the day we need some version of Wall Street to work… The system has to be reformed.”

I talked to Stone just hours before the film’s New York premiere and it was clear that two decades after the success of the first Wall Street, he is still passionate about finance. “The 2008 crash was like a triple by-pass to capitalism and everything is in question.”

In our interview he talks about the lust for money, the damage this episode has done, leadership in Washington. But the most interesting part for me was our discussion about Shia LaBeouf’s character Jake Moore and whether it is possible to be truly ethical and rise to the top in business.

You can see what Stone says in the video above - but I want know what you think?

Can good guys rise to the top in finance or do you have to be part shark to swim with them? Can the Gordon Gekko’s of the world truly reform?

September 14th, 2010
06:51 AM GMT
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A towering national debt, a revolving door of prime ministers and an export-driven economy limping slowly from its worst economic slump since World War II – Japan’s got it bad.

So why is the yen trading at 15-year record highs?

A number of factors have combined to pump the yen up to 83.36 per dollar on Tuesday, the highest since May 1995.

First, to set the scene:  In June 2007, the yen was trading at 122.64 against the U.S. dollar – its highest level in five years. Then the U.S. subprime loan market imploded. Japanese who invested in other currencies with higher yields – known as “carry trades” – brought that cash back home as other currencies, particularly the dollar, was hit by the crisis.

The yen’s natural strength lies in the country’s trade surplus. Cars, electronic goods and other Japanese products sold abroad brings a healthy stream of yen back home. Add to that the influx of cash investors brought back to Japan as the global economy crashed, and the yen continued to strengthen.

Another factor: Countries and investors diversifying away from the dollar in the wake of the crisis were looking for a safe investment, and the yen was a popular choice. Most notably, Beijing has been snatching up a record number of Japanese government bonds instead of U.S. ones.

“That to me explains largely what is happening to the yen in the face of what is reasonably dark economic news and a difficult political situation,” said Benjamin Pedley, head of investment strategy in North Asia for HSBC Private Bank.

And that adds to the difficulties for Japan’s recovery – a strong yen cuts the profits of its products abroad.

The markets are waiting to see if the saber rattling among Japanese politicians on the skyrocketing yen will turn into a government intervention to lower the value of the currency. The government hasn’t taken such steps since 2004.

But Pedley doubts any intervention by the government will have any long-term effect on the strength of the yen. Trading partners in Europe and North America, on balance, would prefer a stronger yen. “The problem is, any intervention would be unilateral – they won’t have any cooperation,” Pedley said.

With the re-election of Naoto Kan as head of his party - and as Japanese prime minister - the markets are betting that the yen will remain high. The Tokyo markets closed before the vote, but hit a fresh 15-year high on the belief that Kan would survive the internal challenge from Ichiro Ozawa, who favored a strong intervention in the markets.

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