Uber and Lyft create Asian valuation conundrum 30 May 2019 U.S. ride-hailing exuberance faded into lacklustre market debuts. At the same time, Singapore’s $14 bln Grab, for example, recently raised capital privately at 7 times expected revenue, compared to Uber’s 5 times. Fast-growing payment units can only justify some of the gap.
Rare-earth gun is best left in Beijing’s holster 29 May 2019 China, which dominates supply of minerals like neodymium, has hinted it might squeeze exports to the United States. In the past, similar embargos caused buyers to find substitutes; bans are hard to enforce, too. The threat suggests retaliatory options are limited.
Arduous road awaits refueled Chinese used-car app 29 May 2019 Uxin is issuing $230 mln of convertible bonds, including to existing investors TPG and Warburg Pincus. It follows a 70% loss in market value since last year's IPO. A short attack, China’s slowdown and generous terms make it hard to see the deal as accurately calling a bottom.
Macau’s Las Vegas ambitions face reality check 29 May 2019 Millions of Chinese visitors are swarming the tiny territory across a new bridge. The $38 bln gaming hub doesn’t seem to know what to do with them, and is mulling a tourist tax to reduce congestion. The city’s Nevada-inspired economic diversification strategy is due a rethink.
Breakdown: ESG investing faces sustainability test 28 May 2019 Assessing environmental, social and governance risks is the hot topic in asset management. Support from politicians, millennials and fund houses, along with high-profile votes like those at Amazon and BP, should boost the $1 trln asset class. But success could create problems.
Airtel debt diet prepares it for Africa price war 28 May 2019 The Indian telecom giant is floating 25% of its African arm in London to help cut debt. The continent’s telecom market is growing quickly but competition is fierce. With less debt Airtel will be better positioned to fight back.
Veteran Hong Kong tycoon leaves bank in a bind 28 May 2019 After 38 years as Bank of East Asia’s CEO, David Li is stepping back and his sons will take over. Returns have been lacklustre as the $9 bln lender battles Paul Singer’s Elliott, which has sued over a share issuance and wants the board to sell. A shakeup is overdue.
Aussie telco buyout exhibits fibre-optic fever 28 May 2019 Sweden’s EQT has offered to buy Vocus for $2.3 bln, a 35% premium to its undisturbed price and far higher than 2017 bids from KKR and Affinity. The price reflects hype around fancy fibre networks, which may not last. Shareholders will be grateful for the opportunity to exit.
Alibaba’s cracks show by revisiting Hong Kong 28 May 2019 The $400 bln e-commerce company plans to raise up to $20 bln from a second listing, five years after its New York IPO. Investors closer to home may give Alibaba a richer valuation. But seeking fresh capital alongside younger rivals also suggests its dominance is under threat.
Fiat gets motors revving on auto consolidation 27 May 2019 The Italian-American car group proposed a 33 bln euro merger with Renault that should keep Nissan warm, please the French state and give the Agnelli family a chunk of cash. More importantly, it unlocks a 5 bln euro bonanza of cost savings that will put industry rivals on notice.
China’s small bank bailouts duck bankruptcy test 27 May 2019 Baoshang, linked to missing billionaire Xiao Jianhua, has been brought under state control. Despite vocal threats, Beijing remains reluctant to allow even disgraced local lenders to fail. Consolidation is the alternative, but healthy peers will prove unwilling partners.
Hitachi’s spinoff lacks buyout chemistry 27 May 2019 Bain and KKR are eyeing the Japanese giant’s $6 bln chemicals arm. Steady cash flow, modest debt – plus turnaround prospects – account for the attraction. But it’s pricey relative to rivals, and a splashy push into next-gen telecoms and electric cars could take years to pay off.
Popular Modi puts Indian resistance to the test 24 May 2019 Prime Minister Narendra Modi has been re-elected despite concerns he strong-arms the central bank, judiciary, and media. Voters seem unfussed about checks and balances - a global trend. But if he pushes them too hard, India’s democratic institutions will struggle to hold up.
Isolated Huawei may be shoved into Beijing’s arms 24 May 2019 Important suppliers such as Arm and Intel are abandoning the Chinese telecom titan after the United States blacklisted it. That puts $50 bln in overseas revenue at risk. Huawei has cash to cope for now, but a breakup or state intrusion can’t be dismissed as potential endgames.
Chinese booze behemoth distills a sobering reality 24 May 2019 Kweichow Moutai’s state-owned parent may be planning to sell liquor directly through a separate unit. It could help usurp some $6 bln of value from shareholders, Breakingviews estimates. For new and growing MSCI index investors, it’s a stark reminder of China’s governance risks.
Viewsroom: America’s topsy-turvy regulators 23 May 2019 Qualcomm lost a lawsuit brought by one DC overseer, even as the DOJ intervened, while $26 bln T-Mobile US-Sprint merger is getting yanked around by agencies with opposing views. Doing business is hard when agencies no longer act in unison. Plus: Is Luckin Coffee going cold?
Cox: “China does it” is a bad antitrust argument 23 May 2019 Sheryl Sandberg says Facebook shouldn’t break up since its Middle Kingdom rivals never will. France and Germany pushed hard for an anti-competitive train merger because of a looming Chinese monopoly. Western values should guide competition law, not Beijing’s Communist Party.
Meituan Dianping delivers sweet-and-sour to Uber 23 May 2019 Getting bigger enabled the $40 bln Chinese company to cut its operating loss by charging restaurants for ads and fees to tote meals. Intensifying competition with Alibaba, however, will eat into cash. Uber can expect similar trouble as it squares off with Amazon-backed Deliveroo.
Jobs will define Narendra Modi’s next five years 23 May 2019 Early results suggest India's prime minister has won a second term. After a campaign tinged with nationalism, voters looked past an employment crisis, but their leader cannot do the same. Missing out on a demographic dividend will have dire consequences for haves and have-nots.
FamilyMart fracas reheats Chinese corner-store war 23 May 2019 The $13 bln Tokyo-based chain is suing to end its mainland joint venture. It already ranks second in China, ahead of Japanese peers Lawson and 7-Eleven. Untethered, it could expand faster, find a tech-savvier partner, and perhaps take the lead.