Asia-Pacific

Aramco stocks Reliance’s war chest for disruption

12 August 2019

Mukesh Ambani says the Saudi giant will buy 20% of his oil-to-chemicals unit at a healthy $75 bln valuation. The billionaire is adding cheap broadband to a revolutionary telecoms offering, and aims to reinvent Indian retail too. The Aramco sale hints at how far he'll go to win.

HSBC can use some lobbying flair in China

12 August 2019

The bank’s Greater China head has left, days after the abrupt exit of group CEO John Flint. Shake-ups happen. This one, though, comes as the lender faces heat in Beijing over its cooperation in U.S. probes into Huawei. New bosses will need diplomatic nous for a tricky task ahead.

Cathay Pacific yields to its Beijing co-pilot

12 August 2019

The Hong Kong carrier will allow Chinese authorities to vet staff flying to and over the mainland, as anti-government protests heat up at home. “Overly radical" employees will be kept away. Local roots and links leave Cathay and parent Swire vulnerable, and with limited options.

Goldman’s top brass become hostages in 1MDB fight

9 August 2019

Malaysia has filed criminal charges against current and former star bankers, including international boss Richard Gnodde. It’s a cunning way to ramp up pressure on the Wall Street firm for a mega settlement. Goldman could end up paying three times to end the sovereign scandal.

Fickle nickel sends out false value signal

9 August 2019

The metal is at its priciest since 2018 having surged 50% this year, more than other key battery materials. The spike, though, rests on misplaced optimism on Chinese growth, and speculation that an Indonesian ban could curtail supply. Producers like Vale can hold off celebrating.

JD deserves to be in trade-war tech discount bin

9 August 2019

Chinese new-age stocks have turned volatile. Loss-making JD, the $40 bln Alibaba-rival, has lost up to one fifth its value since July. The retailer’s focus on sales of big-ticket items make it especially vulnerable to slowing growth and trade tensions. Rivals look more nimble.

J.C. Flowers’ Japan sale marks timely end of era

9 August 2019

The U.S. firm, once called a “vulture” by local press, is selling most of its stake in Shinsei Bank after 19 years. With Japanese lenders staggering, cashing out now of what has overall been a lucrative deal makes sense. Foreign funds owe Flowers for giving them a better name.

Viewsroom: Vicious trade cycle traps U.S., China

8 August 2019

The White House’s decision to brand Beijing a currency manipulator is the latest move in a conflict riven by miscommunication, unrealistic expectations and no obvious way out. Plus: Why the LSE is paying $27 bln for Refinitiv, and which of the data firm’s owners comes out on top.

Donald Trump can weaken the dollar, at a price

8 August 2019

The U.S. President complains about the effect of a strong greenback but what can he do? Intervening in the currency markets may have little effect, but there are alternatives depending on his tolerance for unpleasant consequences. The most helpful move would be to end trade wars.

China’s currency slide could be hard to brake

8 August 2019

Tension with Washington has pushed the yuan past 7 per dollar. Beijing needs to keep depreciation modest, but a weakening economy makes that complicated. A sharp fall could weaken already tepid import demand, while cheap exports would sting regional trade partners like Japan.

Hong Kong protesters strike market nerves at last

8 August 2019

Blockades and walkouts roiled the city this week. Investors have begun to show signs of anxiety: the benchmark index has given up 2019 gains, though other troubles have hardly helped. Beijing may not mind if protests squeeze business. There will be more disruption to price in.

Masa could do with more Buffett at SoftBank

7 August 2019

Quarterly net profit rose 259% on a big stake sale, but operating income fell. More stable cashflows at Masayoshi Son’s group barely cover loan interest. SoftBank is likened to Berkshire Hathaway, which has steadier income from duller companies. That may be worth emulating.

Hong Kong protests cloud Cathay Pacific’s skies

7 August 2019

The $5 bln airline delivered decent earnings and expects a better performance in the second part of the year. It won’t look so rosy, though, if anti-China clashes continue and prompt flyers to pick other hubs. Worse, Cathay’s ties to Air China are unlikely to provide shelter.

Kirin’s Japanese makeover is only half pretty

7 August 2019

The Japanese brewer is buying 30% of cosmetics and kale juice maker Fancl for $1.2 bln. Diversifying away from booze makes sense; rivals are doing it too. But paying a multiple of almost 40 times earnings, over twice the buyer’s own, for a minority stake is not a good look.

Australia’s largest bank deserves reality discount

7 August 2019

CBA reported a disappointing 5% drop in full-year earnings and dashed hopes for a special dividend. That reflects slower growth and higher costs Down Under. Yet the $95 bln lender still trades at roughly twice its book value. A correction is underway, and overdue.

China’s trade balance previews a life in hock

7 August 2019

Its once-massive current account surplus may soon go into reverse. True, the deficit might be minimal at first, but China could one day need to attract an annual $200 bln of foreign capital. More openness in capital markets and financial services would be a good place to start.

Bolloré hits right note to mute Vivendi doubters

6 August 2019

The French tycoon may sell 10% of Universal to China’s Tencent at a price that values the music label at 30 billion euros. Sceptics who feared a deal wouldn’t happen this year will be silenced. But more selloffs are required to erase Vivendi’s persistent conglomerate discount.

India’s bold Kashmir grab raises economic stakes

6 August 2019

New Delhi says an abrupt move to end special rights for the disputed territory will aid development. Kashmir could use more state funds and private cash, but gains will be limited without peace. Serious unrest would also hit a $3 trln Indian economy already in the doldrums.

Trump hands Beijing an excuse to let yuan slide

5 August 2019

China's currency has slumped past 7 to the dollar, a long-defended threshold. That marks a trade war escalation, days after Washington announced fresh tariffs, but also an adjustment to reality: with growth slowing, the yuan was too strong. Diplomatic failure has a silver lining.

Crown’s China troubles upset Melco’s grand gamble

6 August 2019

Fresh allegations around the Aussie casino giant's dealings with Chinese high-rollers have drawn scrutiny Down Under. That leaves new shareholder Melco in an uncomfortable spot. It hoped to use its Crown stake to push overseas; instead, the bet is adding to investor worries.