Chicago bourse succumbs to China’s HNA syndrome 16 Feb 2018 American regulators nixed a sale of the city's exchange to a group led by China-based investors. Officials are worried about murky ownership, an issue that has also bedeviled conglomerate HNA. The question is reasonable though, and raises the bar for Chinese firms.
French state is handbrake on Renault’s valuation 16 Feb 2018 Despite revenue rising 15 pct last year and a cost-saving alliance with Japan’s Nissan, the carmaker trades at a discount to rivals. Selling more cars and boosting margins will help, but the French government’s 15 pct stake is the main obstacle to CEO Carlos Ghosn boosting value.
India’s bad borrowers are a big problem for Modi 16 Feb 2018 A billionaire jeweller linked to a $1.8 billion fraud at a Punjab bank kept asking for credit even after a nationwide bank bailout. He is now overseas, like disgraced liquor baron Vijay Mallya. The pair of bad-debt poster boys tarnish the prime minister’s anti-corruption fight.
Bank of Japan’s Kuroda bags a tricky second term 16 Feb 2018 Continuity in Japan contrasts with a changing of the guard at U.S. and European central banks. Haruhiko Kuroda is unlikely to wind up asset-buying or ramp it up a lot. But he must handle the backdraft from policy changes elsewhere and has limited scope to fight the next crisis.
Asia spotlight gives Credit Suisse gleam, not glow 15 Feb 2018 The Swiss bank is unusually open about its business out east, where managing wealth and cutting deals go hand in hand. The charms of private banking are dulled by a problematic markets business, though. And the benefit of its tilt to high-growth countries is a work in progress.
Becoming China’s KKR is even harder than it sounds 15 Feb 2018 ZZ Capital just lost its CEO, a veteran BofA dealmaker hired two years ago. With a local tycoon's backing, the private equity firm aspired to compete with the likes of Henry Kravis. China is full of buyout wannabes, but competing regionally – let alone globally – is a tall order.
Hadas: Renewed growth tests old economic theories 14 Feb 2018 A slight rise in U.S. wage growth threw markets into fits. Investors believe some long-suspended economic patterns are finally kicking in. Then low unemployment will bring higher inflation and bond yields, and ease voters’ angst. But the old rules may just not work anymore.
India’s $1.8 bln scam turns up heat on bank reform 14 Feb 2018 Unauthorised transactions from a Punjab National Bank branch equal twice the recapitalisation funds from New Delhi. The mysterious fraud may spread to rivals, too. State banks have been constrained from embracing governance improvements. This episode should spur a fresh review.
GNC’s China pill could prove poisonous 14 Feb 2018 The struggling U.S. vitamin vendor is selling a 40 pct stake to Harbin Pharmaceutical. That should help open the door to a big market. The price is steep, though. Convertible shares come with nearly half the board, giving GNC's partner the muscle to block any future rescue deals.
Japan’s economy is in Goldilocks mode 14 Feb 2018 The country is enjoying its longest growth streak since the 1980s. Unlike in the United States, wages and inflation remain subdued, so monetary policy can stay very easy. That “not-too-hot, not-too-cold” mix is good news for investors, even if it stores up problems for later.
Baidu follows right script with video spinoff 14 Feb 2018 The Chinese search engine plans to list its Netflix-like arm, which could be worth $8 bln-plus. Outside investment will help as the unit burns cash on shows and battles rivals for viewers. Lessening the financial load on Baidu also means more time to deliver on its bets on AI.
WhatsApp adds heft to India’s mobile-money crowd 13 Feb 2018 The messaging service is letting users in its largest market send each other money. The app’s popularity in the country may give it a leg up over other players. They all use unique government-backed infrastructure. That may help turn a profit, but cannot be replicated elsewhere.
HNA sale sets stage for a great escape 13 Feb 2018 Selling half a marquee Hong Kong project for $2 bln should help offset a liquidity crunch. Plenty of other foreign assets could be sold without disrupting the Chinese outfit’s core businesses. Since deals were largely debt-funded, HNA needs good prices to make a difference.
Chinese gold mining IPO is a dubious prospect 13 Feb 2018 A Hong Kong listing will help pay off a $1 bln purchase in Argentina, enabling Shandong Gold to do more deals. But high-quality mines are costly and the sector’s M&A track record is poor. Buyers will need to believe the state-owned firm is unusually good at sifting for bargains.
Wrongs in Xerox deal don’t make Icahn right 12 Feb 2018 The activist is correct that the copier maker is giving up its autonomy to Fujifilm for cost savings that may never arrive. Yet his alternative, harking back to its 1970s technology leadership, isn’t convincing either. As print keeps shrinking, there is no quick fix for Xerox.
Macquarie takes bold dive into Danish telecoms 12 Feb 2018 Teaming up with local pension funds to buy TDC for $6.7 bln is a bet on ultra-fast broadband. It’ll be hard to cut costs at the former private equity-owned firm. Stiff competition for infrastructure assets is forcing the Aussie bank to take risks. Financial engineering may help.
Vodafone-Liberty can appeal to Europe’s size envy 12 Feb 2018 The telco may buy some of John Malone’s European cable assets. European regulators blocked past telecom M&A, like Hutchison’s bid for O2. They might look more favourably on a deal that creates a viable rival to Deutsche Telekom and adds cross-border scale to a fragmented market.
Heineken’s number two status brings marginal costs 12 Feb 2018 The Dutch brewer is one of the few global groups still increasing beer volumes. However, acquisitions will weigh on operating margins in 2018. Heineken needs to invest in its new Brazilian brands to take on market leader AB Inbev. That limits the scope for boosting profitability.
Chinese publisher follows foreign data blueprint 12 Feb 2018 Caixin and buyout firm CITIC Capital are buying databases from Euromoney for a reasonable $180 mln. The move reflects the global ambitions of boss Hu Shuli, China’s most famous market reform gadfly. Like Western peers, Hu hopes to create value by combining news with statistics.
India’s offshore trading assault might pay off 12 Feb 2018 Local exchanges will no longer share data with foreign rivals. This move, which is especially painful for Singapore, looks protectionist and will irritate some investors. The higher volumes for Indian exchanges, and a potential tax boost to New Delhi, could make it worthwhile.