Tencent is no match against Beijing’s bureaucrats 4 Jul 2017 Government criticism levelled at the gaming giant's lucrative but addictive mobile hit wiped $14 bln off its market value. Tencent is moving to placate Beijing by limiting game time for kids. But if regulators crack down further on popular titles, appeasement could be costly.
Lotte’s Malaysia IPO has bad chemical reaction 4 Jul 2017 The South Korean conglomerate is raising $877 mln through a cut-down IPO of its petrochemical unit. It still ranks as Malaysia's biggest listing since the 1MDB crisis. But a chunky valuation discount to peers suggests toxic air around the issuer and destination is yet to clear.
Refiner uses crude tactics in Japanese M&A tussle 4 Jul 2017 Idemitsu’s bosses are trying to clinch a merger with a rival, over objections from Idemitsu’s own founding family. Diluting the family through a $1.2 bln share sale is a value-destructive workaround. The move reflects corporate Japan’s disdain for investor rights.
Shanghai Tang sale pushes against M&A current 4 Jul 2017 An Italian textile maker has purchased the China-inspired fashion brand from luxury giant Richemont. The deal is at odds with the image of wealthy mainland buyers snapping up cash-strapped European brands. But Shanghai Tang was never very Chinese, and that's the problem.
Beijing-Trump relations enter dangerous phase 4 Jul 2017 Chinese and U.S. leaders misread each other. Beijing overinvested in a few relationships, while it ran up the trade surplus and failed to rein in North Korea. Trump's team is now pushing back with sanctions, tariff threats and military moves. The risks of a trade war are rising.
Overhaul pits taxman against Indian ingenuity 3 Jul 2017 The rollout of a nationwide goods and services levy has been surprisingly smooth. The real prize would be shrinking the informal economy. Yet citizens have circumvented Prime Minister Modi's previous big reforms. That makes it too soon to hail GST a success.
Naspers’ addiction to Tencent is unhealthy 3 Jul 2017 The South African group is worth $28 bln less than its stake in the Chinese gaming giant. Naspers boss Bob van Dijk rules out a spinoff, but that would be the best fix. Unfortunately for would-be activists, supervoting shares make it hard for outsiders to apply pressure.
Next stop for Chinese bonds is credible ratings 3 Jul 2017 A new Bond Connect lets foreign fund managers buy into the mainland’s $9 trln market from Hong Kong. The easier access is welcome and should speed up China’s inclusion in key indexes. But big inflows, especially into corporate bonds, will require more plausible credit ratings.
Spectre of old normal gives investors a fright 30 Jun 2017 Financial markets have grown used to sluggish growth, low inflation and rock-bottom interest rates. Now the hint of tighter global monetary policy has pushed up yields and knocked stocks. Though better economic prospects are welcome, a shift will be painful for investors.
Hong Kong’s Enigma crash reinforces small-cap fear 30 Jun 2017 The city’s junior board has tumbled, led by a cluster of firms that an influential activist has dubbed "The Enigma Network". Investors were already souring on the low end of the market. Authorities ought to clean house before pushing to attract yet more small-cap listings.
Green bonds could help build new Silk Road 30 Jun 2017 Investors have yet to warm to the Belt and Road, China’s huge infrastructure plan. Beijing’s new development bank, the AIIB, could help by issuing green bonds to fund railways and ports. But if the projects’ environmental credentials are weak, the lender’s reputation will suffer.
Alibaba readies for showdown in Southeast Asia 29 Jun 2017 The Chinese giant spent another $1 bln to tighten its grip on regional arm Lazada. The extra control could be useful as Alibaba confronts local upstarts, domestic peer JD, and possibly Amazon in the future. All will face formidable challenges, from logistics to payments.
Video offers thinning ray of hope for LeEco 29 Jun 2017 Worsening cash problems have pushed the Chinese tech conglomerate to focus increasingly on smart televisions and online streaming, as it sells other assets. Even if mounting financial and legal woes are surmounted, squeezing more profit out of Chinese television will be tricky.
Foreign banks get U.S. stress-test cheat sheet 28 Jun 2017 America's top banks passed the Fed’s annual checkup, including the so-called qualitative portion that has tripped them up before. International players like Barclays and Deutsche Bank will have to take the exam next year. Their U.S. rivals have given them a road map to follow.
Ransomware reveals tech challenges past and future 28 Jun 2017 The Petya cyber attack spread from Ukraine to 65 countries, infecting software that could have been patched. Human error enables hacking of today's IT setups, making prank emails that deceived bank bosses alarming, too. The cloud reduces that danger – but introduces others.
Hadas: Time for a big rethink on interest rates 28 Jun 2017 Central banks are told to worry first about prices. The long-term global trend of low inflation makes that a distraction. The right focus now is on weaning investors off the false highs of easy credit and rising asset prices. Part of the withdrawal is making money more expensive.
Rio Tinto right to take China’s $2.7 bln and run 27 Jun 2017 In selling a group of thermal coal mines, the miner weighed up a higher, less certain price from China’s Yancoal, or a lower, more secure bid from Glencore. The former looks better. Selling to China could bring other benefits. The main thing is to get shot of dirty fuel assets.
Cornered Toshiba rounds on Western Digital 28 Jun 2017 A $1 bln Tokyo lawsuit is meant to force Western Digital to back off from its U.S. litigation. If it doesn't, a vital $18 bln sale could be held up. That would imperil Toshiba’s future, but could hurt Western Digital too. Compromise appears implausible, yet it's urgently needed.
Hong Kong finds Beijing flunking soft-power test 28 Jun 2017 The central government is investing heavily overseas and touting itself as a benign benefactor. But in 20 years it has alienated many Hong Kongers. The bad PR is a blot on China’s image. It suggests Beijing has a lot to learn about winning friends and influencing people.
Breakdown: A graphic portrait of Hong Kong 28 Jun 2017 The city’s fortunes have become ever more entangled with China’s. Breakingviews shows through graphics how the turbulent relationship has shaped the economy and markets, whilst stoking property prices and political tensions.