BREAKINGVIEWS

AIA has a good option against Hong Kong turmoil

17 September 2019

The $120 bln insurer is vulnerable to protests rocking the city with an estimated one third of new business dependent on visitors from the mainland, many hoping to move money offshore. AIA’s policies sold in China are no substitute, but expansion there will ease any future pain.

China keeps trade war fire away from Wall Street

17 September 2019

Goldman Sachs wants a majority stake in its local joint venture. Beijing looks open to letting U.S. banks boost their presence despite tensions. Their lack of market heft means they don’t threaten local rivals, and China needs their support in the future.

Dairy deal Down Under unlocks China prize

17 September 2019

State-backed Mengniu wants to buy Bellamy’s, a maker of infant formula, for some $980 mln. The premium looks frothy, and such tie-ups have soured before. But if local ties mean licences and an Aussie brand lures wealthy buyers, shareholders are right to bet on success.

GM strike is minor fender-bender, not car crash

16 September 2019

The $52 billion carmaker’s investors are pricing in a modest one-week earnings hit from union workers downing tools. It’s not like the old days: CEO Mary Barra gave in on key points before the UAW strike even began. That should bring members back to work within a few days.

Blackstone $4.7 bln REIT deal houses market oddity

16 September 2019

Steve Schwarzman’s firm is paying an 18.5% premium to take Canadian property owner Dream Global private. The lack of daily pricing volatility helps explain why far more is invested in unlisted real estate. But REITs are liquid, have lower fees and tend to outperform.

Oil market may help shale, not vice versa

16 September 2019

Producers of U.S. oil would struggle to ride to the rescue after attacks on Saudi oil fields put a question mark over the security of future supply. Even so, sustained high prices would be a happy outcome for companies that have a habit of digging themselves into a cash hole.

Kazakh fintech IPO complicated by local quirks

16 September 2019

Kaspi.kz combines a bank, a payments business, and an e-commerce marketplace. Its upcoming London listing invites flattering comparisons with established online players. But the peculiarities of the country’s digital economy mean it may struggle to command similar valuations.

First oil cut isn’t the deepest for world economy

16 September 2019

Crude prices jumped almost 10% after weekend attacks on Saudi oil facilities took out over 5% of global supply. Though the spike is bad for already slowing global growth, reserves can make up for the shortfall. Escalating threats of Middle Eastern conflict would do more damage.

Benettons’ credibility on the line in road fiasco

16 September 2019

The $20 bln infrastructure group accounting for half the wealth of one of Italy’s top dynasties is sinking deeper into a probe linked to a deadly bridge collapse. The damage risks infecting their shirts-to-motorways empire. Replacing Atlantia’s boss would be too little too late.

Telco M&A gets rare regulatory boost in Brazil

16 September 2019

The country may treat operators including Oi, which is in bankruptcy protection, with a lighter touch. That gives local units of Telefonica and Telecom Italia reason to pounce. Official support for M&A is a welcome relief from the constraints facing their European parents.

Hong Kong’s revived IPOs play to tougher crowd

16 September 2019

AB InBev and ESR are restarting float plans cancelled during violent protests. Both may have better sales pitches, but ongoing unrest in the city and economic headwinds could still dampen demand. That they are pushing ahead anyway suggests they fear next year will be worse.

Tencent jams pedal into battered China car market

16 September 2019

The tech giant and others have made a roughly $1.2 bln offer for comparison site Bitauto. That will in turn mean bidding for online retailer Yixin, which the target part-owns. It’s a cheap bet that may bring benefits in payments; acceleration will still require an auto recovery.

Washington casts longer shadow over Hong Kong

16 September 2019

Protests in the Chinese territory have rallied momentum for a proposal that scrutinises its special trade status and threatens sanctions. It’ll be hard to make the bill a priority in Congress, but President Trump could use it as leverage as he seeks a broader deal with Beijing.