Shareholder disquiet lights up Chinese gas M&A 7 Jun 2018 A $400 mln deal to sell Sino Gas to U.S. buyout shop Lone Star seems hasty, when the Australia-based firm has just won a key regulatory approval. A 19 pct premium looks ho-hum. If the board sees big risks ahead for foreign energy firms in China, it needs to better explain itself.
Western banks in China can downplay equities 7 Jun 2018 JPMorgan, UBS and others could soon control Chinese securities houses. It is hardly worth taking on local brokers over underwriting new equity issues or in share dealing, except for private-banking clients. So firms will probably focus on areas such as bonds and M&A.
M&A pause is promising for Wesfarmers investors 7 Jun 2018 The $39 billion Australian conglomerate is exiting British DIY and spinning off supermarkets. Newish boss Rob Scott is wary about future dealmaking. That is encouraging for shareholders: it makes more sense for now to work existing businesses harder and return more cash.
Investors think Qualcomm-NXP deal is back on 6 Jun 2018 The $44 bln chip acquisition-in-waiting may finally get approval from Beijing – if Chinese telecom-equipment group ZTE can turn a U.S. business ban into a less damaging fine. NXP’s stock is again trading within 10 pct of the offer price. It’s still a bet fraught with uncertainty.
The Exchange: A Down Under take on Trump 6 Jun 2018 Former Australia Prime Minister Kevin Rudd gives the U.S. president some credit for his dealings with North Korea’s Kim Jong Un. But he explains that Donald Trump’s protectionism has enraged China’s leaders and may play into the hands of the country’s own nationalists.
China hands Facebook its worst political misstep 6 Jun 2018 The social network was already in trouble for Russian election meddling. But its undisclosed data-sharing with Chinese phone maker Huawei will inflame U.S. politicians from both parties. The dalliance makes punishing legislation, and tougher scrutiny from watchdogs, more likely.
Expanded Heathrow’s value to rest of UK is hazy 6 Jun 2018 Europe’s busiest airport has tried to placate critics of a third runway by incentivising flights to smaller UK cities. But large airlines will struggle to make these stack up. Unless budget players can do so, the charge that Heathrow only works for London will be hard to refute.
India’s central bank finds comfort in the crowd 6 Jun 2018 A 25 basis point hike in the main rate comes as the rupee is one of the worst performing regional currencies this year. By acting now, the Reserve Bank of India ensures it doesn’t look like a laggard. But higher rates and oil prices mean the recent growth spurt may soon wane.
Hotpot IPO may offer a tasty dip 6 Jun 2018 One of China’s top hotpot chains is eyeing a $700 mln debut in Hong Kong. It has dealt adeptly with hygiene scandals and is a splash with local consumers, growing blisteringly fast. A push to take its Sichuan cuisine to smaller cities is also something promising for investors to munch on.
Malaysia’s 1MDB purges may hurt before they help 6 Jun 2018 The central bank is the latest institution caught in the backlash over the disgraced wealth fund, with the mooted departure of its governor. More heads will roll in the bureaucracy and beyond, creating extra uncertainty just as external pressures mount and fiscal plans shift.
SoftBank’s Chinese chip deal doesn’t quite add up 6 Jun 2018 The Japanese group is selling 51 pct of its local Arm unit to unnamed buyers at a curiously low $1.5 bln valuation. SoftBank paid $32 bln for the semiconductor designer and the division accounts for a fifth of sales. China’s tech self-sufficiency push looms as a possible factor.
Nuclear deal flags UK’s public investment caprice 5 Jun 2018 Britain may take a stake in Hitachi’s likely $20 bln-plus Wylfa power plant. That could make it cheaper than the controversial Hinkley deal. Yet it’s still a big bet on a scheme that energy shifts could render ill-advised, at a time when simpler public projects have been spurned.
Dutch $8 bln payments IPO banks fat growth premium 5 Jun 2018 Amsterdam-based Adyen is listing shares at a higher multiple than peers. That’s arguably justified by booming sales and racy customers like Netflix and Facebook. But card groups like Visa and tech giants are vying for a slice of the payments pie, likely hurting intermediaries.
Aussie cartel case bodes ill for equity bankers 5 Jun 2018 Citi, Deutsche and client ANZ are about to face criminal charges over how they handled leftover stock in a 2015 share sale. That’s a harsh response to common underwriting practice, with no warning. But regulators seem confident - and their success could inspire foreign peers.
Sharp has better shot at PC reboot than Toshiba 5 Jun 2018 The Japanese group is buying its rival’s laptop business for a song. Toshiba was a PC pioneer, but the last thing it needs now is to battle in this cutthroat, scale-dependent and low-growth industry. Backing from Taiwan’s Foxconn puts Sharp in a slightly stronger position.
China’s bond market faces buyer crisis 5 Jun 2018 A crackdown on off-balance sheet wheezes is likely to sap banks' appetite for bonds. They are by far the biggest buyers, so their retreat will hurt prices. Yield-hungry entrants might appreciate higher returns, but the coming liquidity drain could destabilise a rickety market.
1MDB scandal could yet bring some critical closure 4 Jun 2018 As Malaysia's new prime minister reexamines a case the top U.S. lawman called "kleptocracy at its worst", a Breakingviews e-book recounts the sovereign fund’s rise and fall. Lessons for banks, money managers and politicians will be even sharper if ringleaders are held to account.
Japanese unicorn runs astray ahead of IPO 4 Jun 2018 Mercari, an online flea market, could raise over $1 bln when it lists this month. Tokyo unicorns are rare and this bazaar appeals: it is wooing shoppers and growing fast. Still, a costly push into the United States, tempting but crowded, may warrant a discount at the till.
E-book: 1MDB 4 Jun 2018 The Malaysian scandal once called “kleptocracy at its worst” is being freshly investigated following the country’s shock election outcome. Breakingviews chronicles the sovereign fund’s rise and fall, and the potential repercussions from Kuala Lumpur to Wall Street. Read online or download the book.
EU divisions are weak spot in U.S. trade fight 1 Jun 2018 Responding to American tariffs with duties that hit Republican-controlled districts is shrewd. The next step is harder. Germany’s best option is to ease tensions by cutting car tariffs, but France opposes concessions. Eastern Europe may care more about U.S. security guarantees.