Rio Tinto distracted by shiny new thing 22 Nov 2017 The mining giant is mulling a stake in $15 bln lithium producer SQM. Rechargeable-battery fever has helped lift the Chilean company's valuation to a tech-like multiple. Deals will return with industry growth, but after past mistakes including Alcan, Rio is looking late again.
China’s Skype crackdown invites messaging wars 22 Nov 2017 Apple removed Microsoft's internet phone service from the local store, as foreign call and chat apps get squeezed out of the market. Suppression also supports overseas expansion of homegrown tools Beijing monitors, like Tencent's WeChat. Chinese tech should gird for retaliation.
Silicon Valley gets lesson in Chinese corruption 22 Nov 2017 Lu Wei, the former head of the Cyberspace Administration of China, whom Mark Zuckerberg and Reid Hoffman courted, just got snagged in a corruption probe. It's a reminder that party trumps personnel. And that Lu's former agency is more than a censor. It now determines policy.
WPP rebrands its weak Tokyo defence 21 Nov 2017 The advertising giant is selling into a $1.4 bln buyout it has argued “significantly undervalues” Japanese partner ADK. That reveals a weaker-than-billed negotiating position. One small consolation may be a flimsy plan to stick around by re-investing in the Bain-led deal.
Half-a-trillion-dollar Tencent is market headache 21 Nov 2017 The Chinese tech giant’s market value briefly hit $535 bln, making it bigger than Facebook. While Tencent has helped push Hong Kong’s Hang Seng index to near-record highs, the gains flatter a weaker wider market. Any correction would hit a multitude of investors.
Buffett-backed BYD could use a battery ram 21 Nov 2017 The carmaker’s stock almost doubled this year on China’s plans to rev up the electric-vehicle market. Founder Wang Chuanfu is targeting 1 trln yuan in sales by 2025. Yet earnings are flagging. To outpace nimble upstarts and powerful rivals such as CATL, BYD must scale up fast.
Full-fat valuation suits Vietnamese dairy giant 21 Nov 2017 Vinamilk stock is up 48 pct this year, valuing it at $12 bln. It helps that regional investors Fraser and Neave and Jardines are building big stakes. But even if no takeover follows, the group stands to benefit from booming consumption in one of the most promising corners of Asia.
Toshiba’s fresh funds provide for hard reboot 20 Nov 2017 The ailing Japanese group is raising $5.3 bln, or nearly half its market value again, by selling new stock. That ensures it avoids delisting. Buyers must see value in Toshiba’s residual interest in memory chips, plus the potential for turnaround elsewhere.
China shadow banks feel stronger central bank grip 20 Nov 2017 Beijing has put fresh restraints on the $15 trln market for asset management products, a useful but risk-prone part of the financial system. The rules will squeeze profits at those lending to rickety clients. They show the central bank's growing authority over other regulators.
Alibaba deal guides grocers to checkout 20 Nov 2017 The e-commerce goliath is buying over a third of Chinese supermarket owner Sun Art for $2.9 bln. It underscores how food marks a pivotal retail battleground. And for Alibaba to secure the stake at a 24 pct discount suggests its brick-and-mortar rivals see the writing on the wall.
Chinese authorities throw down gauntlet to HSBC 17 Nov 2017 Scrapping the limit on foreign bank ownership could in theory enable the lender to raise its 19 percent stake in Bank of Communications. But tying up more capital in China’s fifth-largest bank looks inferior to HSBC’s own expansion plans. Better to sell and redeploy the proceeds.
India rating upgrade confirms Modi on right track 17 Nov 2017 Moody's unexpectedly upgraded the country's credit rating for the first time since 2004, in a major boost to Premier Narendra Modi. This recognises that, despite short-term disruption and some negative sentiment, recent reforms will fundamentally improve the economy.
Gender bonds are more than feel-good investments 17 Nov 2017 Investors have flocked to the first-ever U.S. dollar bond promoting equality at work. They are smart to do so. It's more than good PR at a bad time for the war of the sexes. Given the correlation between moral behaviour and sound returns, the bigger issue is lack of supply.
Sorry is the hardest word for central bankers 16 Nov 2017 Bank of England Chief Economist Andy Haldane says rate-setters should speak simply and honestly to the public. The first is easier than the second. Admitting past mistakes or doubts about the present is tough for institutions whose clout depends on an aura of omnipotence.
Indian stock chats have a hot tip about Facebook 16 Nov 2017 As the $520 bln social network tries to contain Russian propaganda fallout, a Reuters report says users on WhatsApp are sharing prophetic financial figures. It could attract the eye of securities regulators, and adds to Facebook's woes in its biggest messaging market and beyond.
Asian private-equity forum taken over by tech 16 Nov 2017 Dealmakers gathered at the Four Seasons in Hong Kong have been chattering mostly about one industry. Some buyouts are threatened by the likes of Airbnb while other firms make bank on startups such as China Literature. Given valuations, the obsession is a tell-tale sign of risk.
Buyout of Australia’s Santos looks a long shot 16 Nov 2017 A private equity-backed outfit could bid about $11 bln including debt for the oil and gas firm, after an initial pitch was rejected, a newspaper says. With Santos’s balance sheet on the mend and a rosy production outlook, even a sweeter offer might struggle to win over investors.
China’s medical reform is pain for foreign pharma 15 Nov 2017 Shanghai Pharmaceuticals agreed to buy the China drugs-distribution business of Cardinal Health for $557 million. It looks like a reasonable deal for both sides. It also highlights how even well-meaning medical reforms could prompt some foreign firms to look for the exits.
Tencent’s overseas strategy is name of the game 15 Nov 2017 Big hits like "Honour of Kings" helped power quarterly sales up 61 pct, to $10 bln. The pace of Chinese gaming growth is likely to slow, however, and quickly. Tencent's investments abroad have been a mess so far. It'll take sharper plans to justify trading at 40 times earnings.
Japan’s growth streak starts to look shakier 15 Nov 2017 GDP grew an annualised 1.4 pct last quarter, marking the longest unbroken growth run in 16 years. The data is volatile, and often revised, but a global boom appears to be offsetting weaker domestic demand. That underscores the need for further structural reform.