Viewsroom: Trump slaps tariff fear on markets 8 Mar 2018 Imposing levies on steel and aluminum has lost the president his economic adviser, ex-Goldman No. 2 Gary Cohn. That has shocked investors out of complacency. Also: Italy’s elections leave fringe parties in charge. And big deals may be back on the agenda for the mining industry.
U.S. metal tariffs may not be biggest trade worry 8 Mar 2018 The president’s steel and aluminum levies have rattled markets and nudged his economic adviser to quit. A probe into Chinese intellectual-property policy could prove more devastating, though. It commands wide support and could inflict broad trade and investment disruption.
China courts tech and Taiwan with Foxconn IPO 9 Mar 2018 The Apple assembler is set to list a $50 bln-plus subsidiary in Shanghai. Speedy approval shows China is serious about luring tech giants onto mainland exchanges. The People’s Republic is also keen to deepen financial ties with Taiwan, even as diplomatic relations sour.
Congo digs deep hole with overhaul of mining law 8 Mar 2018 The world's top cobalt producer is right to update rules written after a ruinous war. But the dramatic shift to bring in more taxes also reneges on an earlier promised 10-year "stability clause". Unpredictable swings damage an already battered image, and put investment at risk.
Asia’s boardrooms require critical mass of women 8 Mar 2018 One fifth of firms in Hong Kong's Hang Seng Index have all-male boards but appointments of women are rising. The next task is to ensure they are present in sufficient numbers for companies to reap the full rewards of diversity. The multiplier effect applies to girl power too.
Chinese bidders find new way to collar their prey 8 Mar 2018 Geely’s boss used an “equity collar” to amass a $9 bln stake in automaker Daimler fast, and without much hard currency. HNA has done something similar at Deutsche Bank and Swiss travel retailer Dufry. Other Chinese firms could use derivatives to make their money go further.
Renault-Nissan will struggle to lose third wheel 7 Mar 2018 The Japanese group may buy France’s 15 pct Renault stake, according a Reuters report the carmakers deny. It’d ease the French group’s heavily discounted share price and a full merger may allow the alliance to cut more costs. But it’s hard to see politicians yielding full control.
Hadas: Doughnut economics needs a new flavour 7 Mar 2018 Author Kate Raworth’s image refers to both the hole of deprivation and ecological disaster beyond the outer rim, both of which are to be avoided. But her recipe is contaminated with eco-left prejudice. A more wholesome blend would start by recognising the current system’s gains.
HNA is enjoying a pleasant stay at Hilton 7 Mar 2018 The cash-strapped Chinese group bet $6.5 bln on the U.S. hotelier, using lots of borrowed money. It has now sold stock in the spun-off Park Hotels for $1.4 bln, while retaining another $7.6 bln stake. HNA has been a crazily prolific investor, but this trip was worth it.
China’s softening on bad loans looks complacent 7 Mar 2018 The regulator is easing buffers required for problem loans, according to media reports. This is another incremental move to relieve struggling lenders and borrowers amid a shadow banking squeeze. That’s good for them, but Beijing appears too relaxed about bank balance sheets.
Ctrip may lose altitude as China travels 7 Mar 2018 The $25 bln online travel agency built a dominant position by aggressively buying small rivals. Now ones backed by giants Alibaba and Tencent are taking off in far flung cities, where tourism is booming. Ctrip's early lead looks precarious now it will have serious competition.
HNA’s Swiss airplane food IPO is far from gourmet 6 Mar 2018 The former Chinese deal machine is listing up to 65 pct of Gategroup to help ease its liquidity crunch. The maker of in-flight meals has expanded since HNA paid $1.5 bln for it in 2016. Factor in an IPO discount, though, and HNA will do well to recoup its original investment.
Kobe Steel forges useful case study from scandal 6 Mar 2018 In a welcome show of accountability, the Japanese manufacturer is cleaning house and its chairman is leaving. Kobe Steel’s account of profit-obsessed management, divisional silos and fragile quality controls also should be required reading for the country's captains of industry.
Beijing electric car leader runs on policy power 6 Mar 2018 A $4.5 billion backdoor listing offers the first pure play on China’s new energy auto market. Beijing Electric Vehicles leans heavily on subsidies and patronage - a precarious position as the central government reworks support for the sector. Its alliance with Daimler might help.
India’s bankruptcy regime requires pragmatic touch 6 Mar 2018 Essar Steel could fetch $6 bln, with bids from groups led by ArcelorMittal and Russia's VTB. Both suitors sit awkwardly with tough rules barring defaulters from buying stressed assets. However, it is better to get good proceeds for creditors than to be purist and fail.
China’s economic targets invite promise fatigue 5 Mar 2018 More money and more credit, less tax and red tape, plus the same old 6.5 pct growth target: Beijing’s key economic conference opened with cautious tweaks to last year's playbook. Chinese promises in Davos that reform will "exceed foreign expectations" look thin already.
Chinese homecoming could fire up tech stocks 5 Mar 2018 Beijing could let Alibaba, Baidu, Tencent and others issue “Chinese depositary receipts”. A loyal local investor base is likely to further bid up the companies’ already lofty share prices. And the scheme could ruin Hong Kong’s own plans to attract banner technology listings.
Review: Some economic ideas do get old 2 Mar 2018 Economist Richard Koo has been talking about balance-sheet recessions since the 1990s. The insight is still valuable, but his latest book pushes it too hard, along with fairly random comments on current topics. Modern economies are too complicated for his style of analysis.
JD’s ad boom is silver lining in Alibaba fight 2 Mar 2018 Costs are soaring at the $66 bln Chinese web retailer as competition with its arch-rival takes new forms. Hence a surprisingly big quarterly operating loss, which upset investors. At least JD's lucrative advertising business is growing fast, offering a welcome boost to margins.
China techie’s $47 bln trade leaves arbs in shade 2 Mar 2018 Zhou Hongyi led a $9 bln buyout of his U.S.-listed antivirus firm in 2016. Now its successor is trading in China at $56 bln. That far outstrips what most hedge funds or commodity traders achieve in years of arbitraging price gaps. Alas for copycats, this is not easy to follow.