Temasek helps a drugstore giant flaunt its glow 10 Jan 2019 The state investor may sell part of its stake in health and beauty giant A.S. Watson. The retailer's size, moves upmarket in the mainland and growth elsewhere in Asia can justify a premium. Cashed-up buyout firms may well be tempted, helping Singapore to cash in on a $6 bln bet.
Emerging Asia is primed for volatility 10 Jan 2019 The new year has brought hints of recovery to the region, thanks to weaker oil and hopes of a more dovish U.S. Fed. But slow growth, trade tensions and key polls in India, Indonesia and Thailand leave room for significant ructions in equity, credit and currency markets.
Hadas: Big mergers show capitalism’s bad side 9 Jan 2019 Celgene shareholders will welcome Bristol-Myers Squibb’s $74 bln takeover offer. The acquirer’s owners might eventually gain too. But such mega-deals distract managers and rarely serve workers or the common good. If corporate purpose was better and broader, they would be scarce.
Beijing U-turn hints at silly season for subsidies 9 Jan 2019 The state planner is hinting at measures to increase domestic consumer spending on cars and appliances. Any tax cuts or handouts would be a short-term fix that shifts focus away from efforts to cut excess capacity. It underscores China’s determination to prop up the economy.
HNA’s haphazard selloff keeps getting trickier 9 Jan 2019 The Chinese conglomerate is flogging stakes in an online lender, life insurer and brokerage. A lack of clear strategy and market perceptions of creditor clout will make it harder to profitably unwind HNA’s $50 bln buying spree. Falling asset prices aren’t helping, either.
Citi plays longer game in China 9 Jan 2019 Even as the mainland economy wobbles, the U.S. mega-bank is ditching a Shanghai underwriting and advisory JV to build a brokerage it can control. A more pliant partner would help Citi compete against entrenched Chinese rivals. Slumping markets should make finding one easier.
WeWork needs path to profit, not enlightenment 8 Jan 2019 The cash-burning office-share outfit – now “The We Company” – wants to “elevate the world’s consciousness.” SoftBank is investing $2 bln more, some at a notional $47 bln valuation. But that’s far less than mooted. Broadening its ambitions as backers shrink theirs is risky.
SoftBank-WeWork mess exposes cracks in Vision Fund 8 Jan 2019 Masa Son’s main partners have balked at pouring more cash into the office-space provider, according to the FT. That undermines the idea of him as a visionary tech investor. It also makes it harder for the $97 bln vehicle to negotiate future deals – or set up a second fund.
Ghosn puts up his freedom as bond for his legacy 8 Jan 2019 The deposed 64-year-old automaker CEO has declared his innocence. Given Japan's 99 pct conviction rate, he could face a decade in jail. Ghosn may hope prosecutors back off. Either way, the man who saved Nissan creates space to pull off another unprecedented rescue - of himself.
Geely flags Chinese car pileup ahead 8 Jan 2019 The $13 bln automaker is forecasting flat sales for the year ahead, following a 20 pct rise last year. Demand is cooling after years of blistering growth, forcing companies to downshift. Politics and over-investment are mostly to blame, but that’s scant comfort to investors.
Samsung’s bad news intensifies $70 bln cash bind 8 Jan 2019 The South Korean giant says quarterly operating profit likely fell to a worse-than-expected $10 bln. With chip prices set to drop further, Jay Y. Lee can draw on his cash pile to boost investor returns and invest in new tech, like 5G. His track record in both is less assuring.
India’s coerced bank M&A has financial logic too 8 Jan 2019 Deals are coming fast on the back of political and regulatory pressure. Plucky $9 bln Bandhan will buy richly valued mortgage lender Gruh without paying a premium. It follows a sensibly-structured three-way merger among state banks. These are some good signs for the industry.
World Bank could be a new stick to beat China 7 Jan 2019 Jim Yong Kim has quit as head of the global lender, and the White House has a big say on his replacement. American officials had already pressured the bank to lend less to China and warned about Beijing’s influence. A hawkish new boss could create a new front in the trade war.
India Insight: Farmers are too big to fail 7 Jan 2019 To win this year’s election, Prime Minister Narendra Modi must appease those reeling from crashing crop prices. Half the workforce depends on agriculture. But rural problems run deep; a solution, whether it is a loan waiver or a quasi-universal income, will need to be radical.
Looser China drops hints of trade pain ahead 7 Jan 2019 The central bank says it will slash the amount lenders need to hold in reserve, freeing up a net $117 bln. It’s not full-blown stimulus. Still, an easing move on the eve of talks signals Donald Trump may be right: China’s economy, and its negotiating position, is weakening.
Review: Saving capitalism from itself 4 Jan 2019 From France's "gilets jaunes" protests to the election of Donald Trump, faith in the system is weak. Two new polemics, "The Curse of Bigness" and "The Myth of Capitalism" blame a lack of competition. Updated antitrust rules can help fix that. It's a plausible aim.
iPhones are unreliable Chinese shopping indicators 4 Jan 2019 Apple’s warning about China iPhone sales has freaked out markets. Yet foreign luxury brands – such as thousand dollar smartphones - make shallow indicators of broader trends. Chinese demand is indeed cooling, but unevenly. Investors need not panic just yet.
Saudi oil will grease China’s currency ambitions 4 Jan 2019 Shanghai’s crude contract is nibbling at dollar benchmarks: a win for Beijing, which wants to increase the yuan’s global clout. Riyadh can help it along by pricing more oil in the currency, as Russia moves in the same direction. The benefits for both sides outweigh the risks.
Airbnb will succeed where U.S. peers failed: China 4 Jan 2019 Unlike Google or Facebook, the home-sharing app’s model dovetails with Beijing’s view that property be used for living, not speculating; and its rating system helps with social credit scoring. Domestic rivalry will be fierce, but Airbnb’s global network gives it one advantage.
Morgan Stanley’s virtual mega-bank model pays off 3 Jan 2019 The Wall Street firm is funding a whopping $33.5 bln loan for Bristol-Myers’ purchase of Celgene through its decade-old alliance with Japan’s MUFG. Acting like one bank gives Morgan Stanley bragging rights and a chance to play alongside rivals with much bigger balance sheets.