As the Chinese e-commerce giant launches its IPO, investors must decide what the shares are worth. Growth, profitability and stock market multiples are a factor. So are potential new businesses, though shaky governance merits a discount. Breakingviews spells out the key numbers.
The new Indian leader has bagged a fat five-year investment commitment from his Japanese counterpart. India will buy foreign-made equipment in return for creating local jobs. Japan’s promise will embolden Narendra Modi to look for similar deals with China and others.
Investors show a touching faith in the ECB president’s ability to boost near-zero inflation. The trust may be misplaced. Mario Draghi’s success in defusing the euro zone crisis relied on his sway over markets. He has less influence over the euro zone economy and governments.
Zurich’s latest parlour game envisages Credit Suisse buying wealth manager Julius Baer. Such a combination would be risky, meshing different banking cultures and systems. It is not clear that the benefits would outweigh the costs. And regulators remain twitchy about big bank M&A.
Citizens in the former colony have two options: choose between Beijing-approved chief executive candidates, or don’t vote at all. The new ruling leaves little room for compromise and risks a showdown with protesters. China’s leaders seem to care ever less what the world thinks.
Plans to cut cash salaries for state sector bosses by up to half may sting. But top executives in effect get another currency – political stock. If China’s ruling party had a share price, it would be rising. The trouble is, outsiders can’t easily see what that stock is worth.
The demise of the post-Cold War vision of Europe? Not a big problem, markets say. Nor do investors see the rise of Islamic State, arguably the biggest threat to Middle East peace in decades, as their issue. The financial indifference is defensible, but increasingly precarious.
International tension has helped stabilise the gold price after a 2013 plunge. But the fundamentals are bad. ETF redemptions persist while bar and coin investment has dropped heavily. Jewellery demand remains soft. Consumers want cheaper gold. They are likely to get it next year.
Chipping away at giants like Baidu and Alibaba means finding a niche. The rapid growth of JD, VIPShop, Qihoo, and YY shows there’s room for new models, and foreign investors are happy to fund them. But the line between healthy competition and profit-eroding rivalry is thin.