Tesla’s China strategy is upside-down 25 Oct 2019 Elon Musk says his Shanghai factory is almost ready, after third-quarter profit surprised on the upside. It will produce more affordable designs, aiming for some 150,000 Model 3 units a year. But China’s mass market is soft. Musk risks overpromising and underdelivering again.
Chinese CCTV giant’s blacklist plan worth watching 25 Oct 2019 Before Hikvision was banned from buying U.S. components as punishment for links to human rights abuses, it boosted inventory and R&D spending. There are also signs the $42 bln equipment maker is taking ESG concerns seriously. The proactive moves should help it mitigate big risks.
India’s pricey truffles leave a bitter aftertaste 25 Oct 2019 Mumbai-listed ITC has unveiled the world’s costliest chocolate. It’s a bonbon-shaped reminder of India’s growing millionaire club. Overall wealth is increasing more slowly, though. With pocketbook protests heating up globally, it’s a bad time for that chasm to widen further.
Viewsroom: WeWork’s future may lie in China’s past 24 Oct 2019 Beijing-based Kr Space switched from renting out space held on long-term leases to selling services after the shared-office market crashed. Following suit may help WeWork stem losses. Also: climate change and Canada’s election. Plus: the gloomy IMF and unrest in Latin America.
Worst of Hong Kong’s bling pain is yet to come 24 Oct 2019 Asia’s luxury-shopping mecca is in its fifth month of mass protests. Hermes, LVMH and others have so far managed to offset the hit by selling more in mainland China. But as violence escalates, so does the risk of regional contagion, challenging the resiliency of that strategy.
Buyout giants get an IPO warning from Down Under 24 Oct 2019 Bain, KKR and TPG have all pulled Aussie listings this month. With the local bourse just off historic highs and new entrants doing well, the finger of blame is starting to point at private equity. Friendlier terms and healthier balance sheets are needed to keep the exits open.
Stalling sales steer Ford toward China exit ramp 24 Oct 2019 A 27% drop in third-quarter revenue from the People's Republic has hurt the U.S. carmaker's recovery. Local partners are struggling, and rivals have pulled ahead. It's hard to leave the world’s largest market, but if Ford can't move forward, reverse comes next.
Restive Chile squeezes copper’s big short 23 Oct 2019 Violent protests halted work at the world's largest mine for the red metal, adding to disruptions elsewhere. The price of copper, however, is not far off a 2019 low, and the market anticipates further weakness. Pessimistic noise on global trade is drowning out supply signals.
Soggy pizza burns Chinese firm’s overseas strategy 23 Oct 2019 Buyout shop Hony cleaned up by acquiring state-backed companies before paying $1.6 bln for PizzaExpress in 2014, the same year it invested in Silicon Valley and Hollywood. The UK chain is in trouble as are other deals abroad, including WeWork. It can be hard straying from home.
Hyundai is a dark horse in driverless car race 23 Oct 2019 The South Korean company is chasing Uber, GM and others with a strong push into autonomous and electric vehicles. A plan to invest $35 bln through 2025 signals the commitment. Hyundai’s poor R&D track record is a worry, but Seoul’s support and tech nous give it a fighting chance.
Bad governance baggage weighs on Infosys defence 22 Oct 2019 Shares in the $46 bln Indian IT firm are crashing on the prospect of a second leadership crisis in just over two years. This time, whistle-blowers accuse boss Salil Parekh of bending accounting rules to boost profit. Investors are not giving Infosys the benefit of the doubt.
China rival offers WeWork half an office blueprint 22 Oct 2019 Like Adam Neumann's company, over-expansion at Beijing-based Kr Space caused a cash crunch. It turned itself into an office manager, reducing exposure to falling occupancy rates. A similar pivot to services can’t salvage WeWork's $47 bln valuation, but it may stem losses.
China’s domestic M&A nudge demands due diligence 22 Oct 2019 The securities regulator is making it easier for unprofitable listed companies to restructure by acquisition. As growth slows, using mergers to help fragmented industries consolidate makes sense. Governance risk and weak finances also mean shareholders will have to be on alert.
The clock is ticking on TikTok’s U.S. business 21 Oct 2019 A senator wants parents to delete the popular video app owned by China’s ByteDance. Even Facebook is taking potshots. TikTok, meanwhile, is building lobbying strength in Washington. But the mood in D.C. is ripe for curbs on any Chinese upstart with global ambitions.
World’s financial superheroes encounter kryptonite 21 Oct 2019 Fixing what’s blighting global growth prospects is, for once, beyond the combined capabilities of the finance ministers and central bankers who frequent the IMF’s annual meetings. They can do a lot, but are proving less potent when gravel is thrown in the gears of world trade.
Gojek CEO takes risky detour into Jakarta politics 21 Oct 2019 The boss of Indonesia’s $10 bln rides-to-video super app has quit to join cabinet. The sagging economy badly needs a tech boost. But rules for digital payments and other areas are in flux, leaving room for conflicts of interest that could hurt the government and the unicorn.
Warehouse IPO reroutes Asian investment bank fees 21 Oct 2019 Warburg Pincus-backed logistics firm ESR is trying a Hong Kong market debut again after postponing an effort in June. Morgan Stanley has been enlisted to lead the $1.4 bln deal over Deutsche Bank and CLSA. Given the industry shakeup, it may be a sign of things to come.
Aussie fintech runs up move-fast-break-things tab 21 Oct 2019 Like other hot startups, $5 bln buy-now-pay-later outfit Afterpay operates in a grey area. Because it is not covered by credit rules, customers borrow for free. Success is inviting scrutiny; regulatory concerns have just erased over 20% of its value. The harder part has begun.
WeWork’s rescue choice couldn’t be easier 18 Oct 2019 The cash-guzzling office-sharing outfit has offers of $5 bln more equity from SoftBank or, if investors can stomach it, super-pricey debt which could put the company under even more quickly. If Masayoshi Son is willing to inject more, WeWork’s co-CEOs should bite his hand off.
Hong Kong shopkeepers live on borrowed time 18 Oct 2019 Small businesses create 45% of jobs in the protest-battered city, yet monetary-easing moves won’t reach companies lenders see as too risky. Many underbanked entrepreneurs need handouts and rent cuts to survive. Their plight reinforces the case for more financial creativity.