Journalists
John Foley is breakingviews' Greater China correspondent, based in Hong Kong. He previously wrote on mergers and acquisitions, capital markets, consumer goods, mining and luxury. Before joining Breakingviews in 2004, John worked as a copywriter for a London-based advertising agency. John read English Literature at Exeter College, Oxford.
Every Asian IPO candidate wants a Goldman Sachs or a George Soros on the register. China’s Minsheng Bank, Sands Macau and Longfor all boast famous names. Such endorsements may help bankers and first-day investors, but do less for the companies themselves, and for the markets.
A top regulator called ultra-low US rates a global risk. True, but China’s own pegged exchange rate generates a flood of dollars, which helps keep US yields down. And a big domestic stimulus is pushing up Chinese asset prices. The US has no monopoly on inward-looking policies.
The Chinese and US leaders will have a friendly meeting – mutual dependence guarantees as much. But the rising and the mature economic powers have different agendas. China could be the stronger partner in a few years. For now, though, it can’t really tell the US what to do.
The UK-listed emerging market lender’s third quarter profits climbed: bad debts receded, Asian markets picked up and the troubled US business may have seen its worst days. Even if economic tailwinds don’t last, HSBC’s strong performance looks more sustainable than most.
The French financial group wants full control of the Asian businesses in its 53%-owned unit. Its plan: rival AMP buys the whole company, and then Axa buys most of it back. Axa puts up only $1.7bn in cash, but minority holders are unhappy. They get mostly hard-to-value shares.
Vast domestic tourism and new infrastructure make a Disney resort in Shanghai worth the investment risk. It’s a smart way for the House of Mickey Mouse to build the brand in a market where media is tightly controlled. But Disney must learn from past financial mistakes.
The US buyout firm has quadrupled its money floating Australian department store chain Myer for A$2.4bn. But the shares fell 9% on their debut, albeit in a weak market. Investors will hope Myer isn’t another let-down like Debenhams, the UK retailer TPG floated in 2006.
Mitsubishi UFJ may raise $11bn ahead of onerous new global rules on bank capital. If its two big rivals follow, some $46bn could be drained from the market, depriving others of capital. Yet it is not clear that Japanese banks really need the cash.
Apollo and BC Partners ditched plans to float German cable business Unitymedia when trade buyer Liberty Global surfaced with an opportunistic bid. The private equity firms get a clean exit and Liberty buys growth without paying a fat premium. It's classic downturn dealmaking.
The Middle Kingdom’s powerful recovery is too reliant on property investment. House prices are soaring. Local governments and developers are rushing to cash in. A US-style meltdown is unlikely, but the bursting of this bubble could undo some of China’s economic achievements.
The independent directors of Axa Asia Pacific rejected the offer of a 31% premium to buy out minority holders. The market agreed, and it looks like the right call. Direct control of Asian assets promises good growth for Axa. And it is probably willing to pay up to get it.
China is spreading its trade tentacles through Asia and Africa. Merging its biggest bank with the emerging-markets lender would create a financial giant to match. ICBC would gain both assets and expertise. Given the headwinds ICBC faces, now would not be a bad time to pounce.
Morgan Stanley is selling its stake in Chinese securities firm CICC because the Wall Street bank couldn’t advance its strategic ambitions without control. The compensation could be annualised returns of 30%. The new owner should see this as a purely financial play.
Individual customers are taking on China’s biggest domestic firms, but the antitrust regime has been more visible in shackling foreigners like Coca-Cola, AB-Inbev and GM when they bid for Chinese assets. The half-baked regulatory framework risks preserving a stodgy state sector.