Xi Jinping offers a lesson on the “Davos discount” 21 Jan 2018 The Chinese president’s 2017 oration was hailed as a new era in global leadership. What followed was a backlash against Beijing’s influence abroad, and little progress on domestic challenges. This ought not to surprise. Promises to the elites of Davos may be less than they seem.
Viewsroom: Donald Trump goes to Davos 19 Jan 2018 The U.S. president heads to the Swiss Alps confab that’s the antithesis of his “America First” ideology. He’ll have competition: keynote speaker Narendra Modi, with his “Make in India” policy. Plus: BlackRock’s Larry Fink pushes social activism. And why Ford is stalling.
Insurance M&A benefits from thin U.S. safety net 19 Jan 2018 Lincoln National is paying $1.4 bln for Liberty Mutual’s employer-based insurance business. It gives the buyer added heft in a growing field as more Americans top up life, health and disability coverage through the workplace. Cost cuts give this deal an added bit of assurance.
Qualcomm slipping away from Broadcom’s grasp 19 Jan 2018 The odds were always long on the chipmaker’s $105 bln unsolicited bid. A new federal probe into Broadcom, Qualcomm’s progress with approvals to buy NXP and souring U.S.-China relations raise them further. Broadcom holds a few cards but its hand would be stronger played elsewhere.
Review: The high cost of measuring the economy 19 Jan 2018 GDP has become an idol. “The Growth Delusion” condemns the idolatry, because this measure includes too much of some things and not enough of others. But author David Pilling misses the revolutionary implication. Economies are too complex to be summed up in a single figure.
Activist makes crypto-demands of bitcoin miner 19 Jan 2018 Hedge fund Oasis wants reform at GMO Internet, a Japanese firm that looks a bit like a small SoftBank. The prospects of an across-the-board victory at a shareholder vote look as unreal as the tokens GMO mines. Yet this could still prompt a juicy revaluation of the $2 bln target.
China’s battery champion will charge overseas 19 Jan 2018 A $2 billion IPO would give CATL a richer valuation than rivals such as Samsung SDI. To justify that price, the battery maker must thrive at home and abroad. Cracking global supply chains is hard. But where other Chinese giants have stumbled overseas, CATL might just succeed.
India’s “Big Bull” likes stocks, not bitcoin 19 Jan 2018 Billionaire investor Rakesh Jhunjhunwala, in a recent Breakingviews Predictions chat, discussed his positive outlook on Indian growth and why he likes domestic equities. He also sees the country privatising assets, including banks, and thinks crypto-currencies are madness.
Guest view: Market rocket fuel will run out 18 Jan 2018 Investors are pushing up U.S. equities with little regard for an array of warning signals, writes former Citibank executive William Rhodes. The Federal Reserve is running out of time to warn them about their “irrational exuberance” before a probable market correction this year.
Bitcoin’s siren song could send TSMC off course 18 Jan 2018 Surging demand for processors used in mining digital tokens boosted results at the world's top contract chipmaker. That helps make TSMC less dependent on smartphones. When the $210 bln giant plans future investment, though, placing big bets on crypto-currency would be foolish.
China’s rebound misses serious foreign money 18 Jan 2018 An economic recovery has fed official complacency. Yet once-transformational foreign direct investment has been hollowed out by China's abuse of multinationals. While overseas money pours into stocks and bonds, hedge funds don't boost efficiency or help in trade wars.
Indonesian ride-hailing unicorn races to relevance 18 Jan 2018 Go-Jek is bringing in new backers including Alphabet and Temasek, sources say, as it expands its platform model across Southeast Asia. To ward off local rivals and be a serious contender in a cutthroat business, the now $4 bln startup has to grow quickly. Deep pockets help.
Unilever’s $47 bln Indian arm is real beauty spot 17 Jan 2018 India is set to become the consumer giant’s largest market by sales. Hindustan Unilever dominates sales of soap and is well positioned to fight off rivals. A multiple of almost 50 times forward earnings – more than twice its parent’s valuation – reflects that promise.
Uber’s next ride-share could be in Southeast Asia 17 Jan 2018 After struggling in China and Russia, the app operator swapped its businesses there for stakes in Didi and Yandex. Another sensible partner would be $6 bln-plus Grab, which shares a backer in SoftBank. As Uber aims for an IPO, it's a good region in which to cut further losses.
Tricky startup key may unlock empty Chinese rooms 17 Jan 2018 Warburg Pincus expanded its shared-economy suite by leading a fresh $620 mln investment into Ziroom. The unicorn capitalizes on China's housing-boom crackdown by flipping fallow flats into rentals. It's a clever strategy, but one that will depend on lifting dismal profit margins.
Mizuho’s CEO choice may be lost in translation 16 Jan 2018 The Tokyo bank's next boss comes from the securities division. That's less telling than, say, if Deutsche Bank puts a credit trader in charge. Japanese executives tend to move around more. Given Mizuho's challenges, though, Tatsufumi Sakai's expertise should prove helpful.
Alibaba rival’s switch in logistics stacks up 16 Jan 2018 Chinese web retailer JD is raising $2 billion from investors to fund its warehousing and delivery unit, Reuters says. This sensible burden-sharing brings JD and Alibaba’s business models closer together. The trade-off is diluting existing shareholders in a promising venture.
Lufax flotation offers a safer bet on China debt 16 Jan 2018 The peer-to-peer lender wants to raise as much as $5 billion from a Hong Kong IPO, says IFR. Lufax is better hedged than rivals, with the financial backing and risk acumen of insurance giant Ping An behind it. But this growing sector is volatile due to a shadow banking crackdown.
Chinese web giant Tencent gets U.S. tax bonus 15 Jan 2018 U.S. investors snapped up more than half of a $5 billion bond sale by Tencent. That's partly thanks to Republican tax cuts, which may result in fewer bonds from American tech stalwarts. That helps the gaming and social media outfit to lock in cheap overseas funding.
New push for global yuan fuels fresh appreciation 15 Jan 2018 China is restarting the project to take its currency global after years of neglect. European central banks are helping by including it in their reserves. Throw in a stronger euro, and a seemingly relaxed Beijing, and the yuan could easily strengthen further.