Riyadh is clouding Masayoshi Son’s $100 bln vision 15 Oct 2018 Fallout from the disappearance of a prominent Saudi journalist has hit SoftBank, whose mega fund is backed by the Kingdom. Shareholders are rattled: entrepreneurs will probably be wary of accepting fresh investments. Raising more money now looks far more challenging too.
Macau is handy chip in China’s standoff with Trump 15 Oct 2018 The gambling hub’s 20 year licenses for Sands China, Wynn Macau and others are nearing their expiry. It gives Beijing leverage over founders Sheldon Adelson and Steve Wynn, both friends of the U.S. president. Squeezing them could be one way to get Trump’s attention over trade.
Cox: Global finance has a Saudi Arabia problem 14 Oct 2018 Wall Street bosses and their European and Japanese peers are reconsidering next week’s “Davos in the Desert.” Like China, there’s money at stake. Unlike Russia there’s no guidance from above. A coordinated pullout following Jamie Dimon’s withdrawal is their least-bad option.
Review: Forget robots, capitalism is the future 12 Oct 2018 Ex-Fed boss Alan Greenspan and journalist Adrian Wooldridge have penned a fast-paced history of the good wrought by American entrepreneurs. But their solutions for today’s perceived stagnation – less welfare and fewer regulations – undervalue the adaptability of their subjects.
Chinese battery drive hits amber light in Chile 12 Oct 2018 To clinch a $4.1 bln stake in lithium giant SQM, China's Tianqi has agreed with antitrust officials to limit access to sensitive information. A hostile shareholder may yet thwart the deal but as Beijing's clout in the industry grows, such acquisitions will only get tougher.
India’s bailout agency is fuelling moral hazard 12 Oct 2018 Life Insurance Corporation has a reputation for buying New Delhi’s cast-offs, most recently a failing bank. The nation’s largest investor, with around $400 bln of assets, can absorb short-term losses. But its largesse encourages shoddy governance at the heart of India Inc.
Chinese market slump tests index-crafter nerves 12 Oct 2018 Plans by FTSE Russell and MSCI to expose a fresh $76 bln to mainland stocks look shaky as Shanghai out-swoons New York. If Beijing reacts clumsily, as in 2015 when it allowed shares to be halted and attacked traders, sceptical investors could be emboldened to revolt.
Markets are finally getting back to basics 11 Oct 2018 A slump in stocks slowed on Thursday, partly thanks to tame U.S. inflation data. American equity valuations are high, trade tensions and interest rates are rising, and earnings season is under way. Six months of steady tech-led gains may be giving way to the facts on the ground.
BMW writes China JV owner manual for its rivals 11 Oct 2018 The luxury carmaker will take control of its venture with Brilliance Auto for $4.2 bln, making it the first to take advantage of new rules. Share weakness has helped it drive a bargain, even if the deal doesn’t close until 2022. Others like Daimler may follow in the slipstream.
Barbarians pushing boundaries at Asian gates 11 Oct 2018 Buyout shops PAG and Blackstone are being uncharacteristically aggressive in separate property bids in Hong Kong and Sydney. Abundant cash seeking deals may lead to more such hostilities. It also risks undoing private equity’s carefully managed reputation for takeover civility.
Tencent’s $230 bln selloff is a double pain 11 Oct 2018 A tech rout has hit the Chinese giant harder than U.S.-listed rivals like Alibaba. Tencent's loss is increased by its exposure to fickle mainland punters and a large emerging market weighting. But boss Pony Ma’s top problem is a regulatory crackdown undermining the core business.
U.S. deal review could be new stick to beat China 10 Oct 2018 Minority stakes in U.S. tech firms will be under tougher scrutiny starting next month. That’s reasonable, and the Treasury, which will oversee reviews, has a rational approach. The risk is that hardliners co-opt the process to hurt Beijing once tariffs reach their limit.
IMF rightly focuses on left side of public ledger 10 Oct 2018 Investors obsess about national debts, but pay far less attention to assets. An IMF analysis tries to restore some balance. Though data is patchy, measuring net worth could offer a clearer picture of a country’s financial health – and oblige politicians to manage it better.
Self-fulfilling prophecy imperils Chinese shoppers 10 Oct 2018 Tourism spending during last week’s Golden Week holiday grew a healthy 9 pct from a year ago to nearly $90 bln. Any “consumer downgrade” seems more informed by alarming anecdotes than any hard data so far. There are good reasons, though, to fear the spread of skittish sentiment.
SoftBank in danger of over-WeWorking itself 10 Oct 2018 The Japanese group may invest up to $20 bln for a majority stake in the office-sharing outfit. That suggests it could wind up as roughly a fifth of SoftBank's Vision Fund. That would be a dangerous amount of concentration risk, especially given WeWork’s unproven business model.
Essar deal dilemma sums up investing in India 10 Oct 2018 To buy the steelmaker out of bankruptcy, suitors first must pay off any debt of defaulters in their orbit, a court has ruled. For ArcelorMittal, that’s a $1 bln auction entry fee. India’s unpredictable business and legal environment makes such a decision especially difficult.
China worries give luxury investors excuse to sell 9 Oct 2018 Reports of stricter customs checks on Chinese tourists returning from the week-long national holiday triggered a selloff in luxury stocks. Government curbs are nothing new. But the sector’s high valuations make shareholders nervous about any sign of weaker demand from China.
Hong Kong’s political risk takes new form 9 Oct 2018 Leader Carrie Lam has made a good start tackling a housing crisis, and public sentiment is improving. With mass protests less likely, she may push for a controversial security law next. The business community appreciates stability, but eroding rule of law is a rising threat.
Beijing’s property crackdown looks half a bluff 9 Oct 2018 Policymakers are mulling an end to pre-sales that provide one third of developers’ funding, and pushing a nationwide housing tax. Both would sting, and investors look nervous. In the current climate, however, Beijing can’t afford to undermine its most important asset class.
Hadas: Nobel rewards pointless economic modelling 8 Oct 2018 Paul Romer won half the 2018 prize for recognising that education and governments help growth. William Nordhaus won the other half for condemning man-made climate change. Obvious? Maybe, but their work has complex equations. Unfortunately, these obscure more than they clarify.