Pesek's View From Asia: Bad Apples and Rotten Rupiah

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Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:

Hedge fund star Bass is unimpressed by Tokyo Olympics .

For Abenomics enthusiasts, Tokyo winning the 2020 Summer Games is the icing on the proverbial cake. The hope is that staging the Olympics will provide an economic tailwind for Prime Minister Shinzo Abe's economic revival plans. Japan bear Kyle Bass, founder of Dallas-based Hayman Capital Management, disagrees. Kyle argues that his bet against Japanese government bonds is even more compelling than shorting U.S. subprime debt, which netted him $500 million in 2007. "The Olympics don't have any material impact on our investment philosophy in Japan," Bass told MarketWatch. "They are at best a net neutral for Japan."

Thai court on hot seat for bad cigarette ruling .

Kudos to Thai health officials for pushing back against a controversial court ruling in favor of Philip Morris and other tobacco giants. Thailand wants to cover 85 percent of cigarette boxes with graphic safety warnings; a judge ruled that the step was beyond the government's legal powers and would hurt the industry. Well, exactly. As developed nations clamp down on smoking amid skyrocketing health costs, Big Tobacco is shifting to less regulated and rapidly-growing markets in Asia. Leaders are wise to try and head off the dynamic, lest they too see the bulk of their health budgets eaten up by smoking-related illnesses decades from now.

Crime doesn't always pay in China.

Oil giant PetroChina sent shockwaves through corporate China earlier this year by removing four executives amid a government probe into former chairman Jiang Jiemin. In theory the company, which employs more than half a million people, could have circled the wagons and protected its own. By moving -- most likely under government pressure -- to remove what UOB-Kay Hian analyst Shi Yan calls "some bad apples," PetroChina has been rewarded by markets. Its yield premium on dollar bonds maturing in 2041 hit a three-month low on Sept. 10. Not bad, considering it's the world's second most-indebted energy company. Clearly there are benefits to cleaning house in corruption-plagued China.

Indonesia grabs dubious honor from India.

Even as the rupee plumbs all-time lows, the Indonesian rupiah is faring even worse in an Asia worried about a change in Federal Reserve polices. Concerns about "tapering" reached a fever pitch in June as Chairman Ben Bernanke dropped hints about winding down the Fed's quantitative easing. Since then, the rupiah has fallen even more spectacularly than the rupee. While India, too, has a widening current-account deficit, Indonesia's is causing even more alarm among investors, which may make higher rates inevitable. President Susilo Bambang Yudhoyono has few other options to get Indonesia's national balance sheet in order.

Protests may pay off in undemocratic Cambodia .

When he wrote his book "Outliers," Malcolm Gladwell probably didn't have Hun Sen in mind. But the Cambodian prime minister has taken the book's advice -- to practice for 10,000 hours -- to new heights: he's been in office for more than 10,000 days. Now Cambodia's longtime strongman may be opening the door to an eventual political transition. After a disputed election and recent opposition protests in the capital Phnom Penh, he has agreed to consider electoral reforms demanded by his opponent Sam Rainsy. The ruling party still plans to open parliament next week and put Hun Sen into office yet again. But change may be in the air in Phnom Penh.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Willie Pesek at wpesek@bloomberg.net