Chip IPO tests Hong Kong-China feedback loop 6 Jul 2020 SMIC more than doubled its Shanghai offer to $6.6 bln on strong demand. Its Hong Kong shares had risen sharply ahead of the mainland listing valuing the semiconductor maker at 100 times forecast earnings. That’s hard to justify, even with Beijing’s aim of tech self-sufficiency.
Corona Capital: Quarantines, UK bailout, Drugs 3 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Britain relaxes its “bonkers” quarantine rules; a small UK bailout sets a troubling transparency precedent; and India’s drugmakers click into dealmaking mode.
Sea’s $55 bln valuation can rise with the tide 3 Jul 2020 The Tencent-backed tech outfit’s market cap has risen eight-fold in the three years since its New York debut. A virus-related boom in games and e-commerce in Southeast Asia has helped justify a rapid rise, and expansion plans are on. Its payments unit may provide an extra buoy.
Tencent’s hot sauce fraud exposes expired tech 3 Jul 2020 The Chinese video-games titan appears to have been taken by crooks pretending to work for Lao Gan Ma, a popular spicy condiment, using a forged company seal to ink an advertising deal. Such old-fashioned methods have embroiled others including SoftBank. Digitisation is overdue.
Viewsroom: Wirecard, Hong Kong and Tesla 2 Jul 2020 The German fintech scandal shines a light on its hapless regulator; China’s new security law stinks up the fragrant harbor and Elon Musk hasn’t just surpassed Toyota in market value, he’s becoming as rich as Croesus. Breakingviews columnists around the world weigh in.
Corona Capital: Tesla, OPEC 2 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Tesla speeds past its traditional rivals, and OPEC’s next meeting shapes up to be a bruising encounter.
Pinduoduo is stuck in startup governance mode 2 Jul 2020 China's e-commerce darling has swapped its founder CEO for the other co-founder. The pair wields supervoting stock and controls the board. The $100 bln company doesn’t even have a CFO or other top executives. They need to upgrade management, but this is an odd way to start.
Ping An untangles one knot in its leadership 2 Jul 2020 Ma Mingzhe is giving up his CEO role and will remain chairman of the $187 bln insurer. The split is welcome but quirky governance endures with three other co-CEOs. Multiple bosses can be effective when responsibilities are clearly divided. Ping An mostly ticks that box.
Hadas: Wirecard woes show need for fraud-busters 1 Jul 2020 Accountants EY may have been particularly inept in missing fraudulent bank balances at the German payments processor, but auditors are normally right to presume companies are fairly honest. Sniffing out cheating is a job for separate, licensed and powerful forensic specialists.
Corona Capital: Drug hoarding, Vacation-free world 1 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Stockpiling of Covid-19 treatment remdesivir may come back to haunt the Trump administration, while a forecast of $3.3 trillion in lost tourism is more than an inconvenience for some national economies.
China smothers Hong Kong in heavy security blanket 1 Jul 2020 A harsh new law will quash protests that have vexed the business community. The definition of subversion is ominously vague, while allowing for extradition and secret trials. It also applies to non-residents, further complicating risk management. The price of order is high.
The Exchange: BIS chief Agustin Carstens 30 Jun 2020 It has been a hectic year for central bankers, who are on the front line of fighting a global recession. The head of the Bank for International Settlements joins Swaha Pattanaik to discuss how to unwind massive monetary stimulus, risks in the financial system, and regulation.
Wirecard is argument for a Big Four pay clawback 30 Jun 2020 Audit giant EY is embroiled in the German scandal after signing off accounts when $2 bln was missing. Remedies like splitting bookkeeping from consulting or using two auditors may focus minds on finding frauds. But until pay is linked to clean accounts, scandals will continue.
Corona Capital: U.S. recovery, Small-business aid 30 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: White House virus adviser Anthony Fauci’s estimate that U.S. cases could breach 100,000 a day is bad news for the economy. Plus: Uncle Sam’s loan program for small businesses comes to an end with money in the bank.
India’s war on China apps will have network effect 30 Jun 2020 TikTok and others from Tencent to Alibaba are among those banned on security concerns. It narrows a growth market for Chinese tech and may embolden other governments to close doors. But Beijing has plenty of ways to retaliate, including in pharmaceutical supply chains and more.
Carlyle hedges Indian link in pharma supply chain 30 Jun 2020 The buyout firm is taking a 20% stake in Ajay Piramal’s contract drugmaker at a healthy $2.8 bln valuation, ahead of a planned carve-out from its lending-focused parent. The division can benefit from a worldwide reshoring push. Short-term concerns explain the fiddly deal terms.
German lift LBO hits ceiling on lax lending 29 Jun 2020 Advent and Cinven, who paid $19 bln for Thyssenkrupp’s elevator unit, had to tweak terms for the deal’s funding after an investor revolt. Rock-bottom interest rates give buyout groups a strong hand with creditors. After the Covid-19 crisis, however, lenders’ tolerance has limits.
Corona Capital: Amazon, Car perks, College sports 29 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: Companies are trying to bolster pocketbooks. Amazon makes extra payments to employees while car companies are offering major discounts. Plus: Under Armour ditches its UCLA deal.
Beijing picks one too many bilateral brawls 29 Jun 2020 China has added India, Canada and Japan to its lengthening list of diplomatic spats. Trade partners are too distracted to coordinate a response, but individual retaliatory measures are adding up. With its economy still weak, Beijing can ill afford to fight on so many fronts.
Tencent embraces its inner Goldman Sachs 29 Jun 2020 The Chinese tech titan’s investment portfolio has swollen to more than $65 bln with stakes in Warner Music, Afterpay and more. The deals, led by a Wall Street banker, are now vital to Tencent’s growth. Financial and strategic returns from buying make up for a lack of building.