Pacific Business News = 12/23/15

December 23, 2015
Curation and analysis by Marc A. Ross

Only six GOP candidates likely to make next debate stage: Fox Business will keep the undercard and include national and early-state polling for the next GOP debate on January 14. Politico Current polling would have Trump, Cruz, Rubio, Carson, Bush, and Christie on the main stage

Trump shuns proven GOTV tactics in early states: Grassroots organizing is crucial in the early voting states of Iowa, New Hampshire, South Carolina and Nevada, and Trump insists he has built a top-flight operation that can compete with his rivals and propel him to victory. The chief strategist for Mitt Romney’s 2012 campaign, Stuart Stevens, says there is a “cold fusion” quality to Trump’s theory that through sheer force of personality he can get a new universe of first-time voters to show up and vote in caucuses. “It’s an interesting idea,” Stevens said. “I doubt it will work.” The Hill The first 2016 ballots will be cast in the Iowa caucuses on February 1–40 days out

AP’s top business story = China slowdown: China’s sharp slowdown was chosen as the top business story of 2015 by business editors at The Associated Press, followed by the plunge in energy prices. AP

Cheap oil and pricey unicorns: Two of the topics among the Fiscal Times’ top 20 stories for 2015. Fiscal Times

2015 was the year US-China relations went public: 2015 was the year longstanding tensions went public, in no small part due to changes in U.S. policy. Graham Webster — The Diplomat

China overshadows global outlook for 2016: Country is hugely important in determining world economy and the direction of capital flows. FT

The global conflicts to watch in 2016: Concerns about the Middle East, and especially Syria, have displaced other threats. The Atlantic

‘Sixteen for ‘16’: Predictions for Asia in 2016 Asia Society China below 6 percent and India above 7 percent

Hague will vote to stay in EU: The EU has its failings but it also provides stability for fledgling democracies and keeps our kingdom united — we would be foolish to leave. William Hague — The Telegraph Hague is the most talented British politician to not make it to No. 10

A strengthened IMF benefits the US and the world: Overooked in the circus of national politics this past week was a small victory for U.S. global leadership and common sense — in the bipartisan agreement to restore full U.S. support for the International Monetary Fund. David Ignatius — WP

Where Abenomics is working: “People are missing how Abenomics is changing the landscape of how companies do business,” said the head of one of America’s major investment banks in Japan,“People are missing how Abenomics is changing the landscape of how companies do business,” said the head of one of America’s major investment banks in Japan. Michael Auslin — AEI

Nine signposts for navigating market volatility: The return of market volatility last week shouldn’t have come as a big surprise given the unusual economic, political and geopolitical fluidity around the world. The past year has been characterized by occasional spikes in volatility, either in the form of sharp asset-price gains or, as was the case last week, acute falls. And 2016 promises a lot more of the same, which should force investors to pay greater attention to the dynamics of potential tipping points. Mohamed A. El-Erian — Bloomberg View

Poor Philip Morris just can’t get a break: There is no joy in Tobaccoville. Mighty Philip has struck out. An international tribunal has rejected Philip Morris International claim that Australia’s plain packaging law for cigarettes violated its rights. John Brinkley — Forbes

How China sees Russia: Beijing and Moscow are close, but not allies. Foreign Affairs

China’s $1 trillion buying spree: China Inc’s outbound acquisitions spree in 2015 helped push Asia-Pacific’s annual deal value past $1 trillion for the first time, with 2016 set for a bigger splurge still as Chinese firms buy even more assets abroad to sidestep slowing domestic growth. Reuters

Iron ore forcast is ugly: Australia’s Department of Industry & Science cuts its 2016 iron ore price forecast by 19%, now expecting prices to average $41.30/metric ton next year compared to $51.20 just three months ago, according to its latest quarterly report. GS predicts iron ore will remain under $40 for the next three years as China’s slowdown forces the global industry into a long period of hibernation.

Oil price crash is taking a heavy toll on Canada: Crime is rising, home prices are falling and food banks are overwhelmed in Calgary as job losses spread. And the worst isn’t yet over in the heart of Canada’s oil patch. Some of the city’s largest employers are poised to cut more jobs in 2016 as they reduce spending for a second straight year, adding to an estimated 40,000 oil and natural gas positions lost across the nation since the crude price rout began 18 months ago. BloombergCalgary business community feels “funeral”-like, mayor says

Man who called China’s boom and bust now warns of crisis risks: One of the few forecasters to predict both the start and peak of China’s equity boom is now warning the nation will be buffeted by the same forces that caused financial crises around the world over the past four decades. Bloomberg
“Historically, every time the U.S. current account improved, concurrent with dollar strength, some country somewhere in the world plunged into some sort of crisis”

China to extend yuan’s trading hours, widening currency’s appeal: Central bank to increase currency’s trading day by seven hours, opening it to more foreign investors. WSJ

China remains vexing campaign test for presidential candidates: The question of how to handle the rising economic and military power has become a litmus test for the people who would like to become the next commander-in-chief. Bloomberg Rarely what is said about China on the campaign trail makes it to the White House

Rapid development in China leads to rapid risk: Helmed by a leading scientist, home to some of the nation’s biggest technology companies and the site for a new V&A-backed design museum, Shenzhen is the posterchild for economic reform and smart city planning in China. But the deadly landslide that hit the city on Sunday when an enormous rubbish heap collapsed has undermined Shenzhen’s reputation and once again underlined how rapid development in China has all too often been achieved by papering over the cracks in the system. FT

Fencing in China proves to be no easy task: When this year’s East Asia Summit issued a communique referring to “serious concerns” about Chinese activity in disputed waters of the South China Sea, many took it as a sign of an emerging united front against Beijing. It seemed the Association of Southeast Asian Nations was becoming less timid about siding with the U.S.-Japan alliance to counter China’s maritime assertiveness. Nikkei

Syngenta won’t go at it alone: Syngenta is in talks with Monsanto, ChemChina and others but has not received a concrete takeover offer and is keeping all options open, Chairman Michel Demare says. “Given what shareholders expect for the next 12 months, going it alone is hardly possible”

Shell cuts 2016 capital spending: Royal Dutch Shell says it will cut its 2016 planned capital spending to $33B from previous guidance of $35B, marking a ~30% reduction from the combination of Shell and BG in 2014, which on a combined group basis totaled $47B; Shell also cuts its spending forecast for this year by $1B to $29B.

Cardinal Health expanding to Asia: Cardinal Health of the U.S. is getting ready to expand in Asia. The company’s $100 billion in sales come from supplying pharmaceuticals and medical devices in the U.S. Its Asian footprint has been relatively small. In a recent interview with The Nikkei, Donald Casey, chief executive of Cardinal Health’s medical segment, explained how the recent acquisition of the Cordis, a medical device maker, from Johnson & Johnson can be a game changer. Nikkei Graying of Japan and China great big opportunity

Airbus gets $2.27 billion order from China Southern Airline: China Southern Airlines Co., Asia’s biggest carrier by fleet size, announced an order to purchase 10 Airbus Group SE wide-body aircraft to meet the growing demand for travel in the world’s most populous country.
Bloomberg Order is for 10 Airbus A330–300 jets with delivery in 2017–19

DuDow will cut costs more than the companies’ official projections: A deep dive into potential cost synergies resulting from the merger of Dow Chemical and DuPont points to cost synergies being as high as USD5.1–6.1bn versus the USD3.0bn announced by the company managements. Barron’s

Canadian Pacific makes another run at Norfolk Southern: Norfolk Southern added that if Canadian Pacific was confident that the two legal tests, namely avoiding premature control, and furthering public interest, could be cleared through its anticipated voting trust structure, it could pursue a declaratory order from the STB. CP says its new offer is worth US$128 to $141 per share, or a 61 to 78 per cent premium to Norfolk Southern’s unaffected share price of $79. AP

Goldman Sachs: 21 of the world’s most interesting charts Bloomberg

Edited by Marc Ross
Feel free to send me an email with news, gossip, investment leads, and/or restaurant tips — marc@caracal.global

Pacific Business News will be on hiatus until Monday, Janaury 4. I am going to the beach.

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