India prizes fiscal prudence over corporate debt 23 Jun 2016 A share buyback by a state-owned miner and an auction of telecom spectrum suggests companies may have to borrow to help the government meet its deficit targets. New Delhi seems intent to meet its pledge to raise $23 billion for the state coffers - even if it upsets India Inc.
Hong Kong IPO cornerstone habit is out of control 22 Jun 2016 The territory’s addiction to pre-selling shares in new listings has gone too far. China Development Bank’s leasing unit may hand at least 70 pct of its $1 bln offering to friendly investors. The practice distorts prices, hurts liquidity, and diminishes Hong Kong’s reputation.
SoftBank’s mixed signals prevent market upgrade 22 Jun 2016 The Japanese group has shown it can sell winners and tackle debts, with an $18 bln blizzard of selloffs. But botched succession planning tightens founder Masayoshi Son’s grip. The group’s sprawl, problematic core holdings and grand ambitions mean investors will remain wary.
Chinese ouster big wake-up call for Spanish boards 21 Jun 2016 Shareholders in Spain’s NH Hotels have voted to remove China’s HNA from the board of the Spanish hotel group due to accusations of a conflict of interest. Activist investors are a rare sight in the cosy boardrooms of Spain. This sets an important precedent.
Tencent displays financial skills in Supercell buy 21 Jun 2016 A consortium led by the Chinese gaming giant will buy 84 pct of the Clash of Clans maker for $8.6 bln. Tencent will have voting control, yet will invest less than half that sum in equity. It’s a shrewd way to reduce the risks of buying into a notoriously hit-driven business.
SoftBank’s long-term plan abruptly cut short 21 Jun 2016 Heir apparent Nikesh Arora is quitting after Masayoshi Son opted to keep the reins at the Japanese tech group. In just two years, the ex-Googler was paid over $200 mln and spent billions. The succession mess leaves SoftBank and its mercurial founder as hard to read as ever.
India’s new FDI rules come wrapped in red tape 21 Jun 2016 New Delhi has relaxed foreign investment rules for the second time in eight months. The overhaul, which applies to everything from airlines to retail, is significant and keeps up the government’s reform momentum. Yet the details leave room for bureaucrats to create obstacles.
Wal-Mart picks right battle in China with JD deal 21 Jun 2016 The U.S. giant is selling its local website to rival JD for $1.5 bln in stock. Wal-Mart only recently took full control of the unit. But battling Alibaba and JD would have been difficult and costly even for the world’s top retailer. Now it can focus on boosting offline sales.
Vanke’s white knight leaves shareholders in a bind 20 Jun 2016 China’s top property developer wants to buy land from Shenzhen’s metro operator for $6.9 bln in stock. If approved, this would help Vanke see off an unwanted suitor. Diluting existing shareholders is hardly investor-friendly, but vetoing the deal would not do much good either.
A checklist for India’s new central bank chief 20 Jun 2016 The Reserve Bank of India needs a new governor after Raghuram Rajan’s premature departure. The ideal candidate would support reforms underway and have some experience as an international macro-economist. Crucially, though, he or she needs to be able to stand up to the government.
India’s shine dims with loss of central bank chief 19 Jun 2016 Raghuram Rajan will leave the Reserve Bank of India in September. Nasty politics may have forced his decision. The governor’s departure raises the risk that key economic and financial reforms he started will not be completed. India’s credibility in global markets will suffer
Symbolic iPhone ruling attests to real China risk 17 Jun 2016 A Beijing regulator ordered Apple to stop selling some smartphones in the city because their design was too close to a Chinese firm’s model. The ruling probably won’t have much effect, but it’s a reminder of the uneven field upon which Apple, Uber and others are playing.
Review: Mapping China’s economy for outsiders 17 Jun 2016 Arthur Kroeber’s guide to the Chinese economy punctures the myth that it is governed from on high. He describes the competing interests and political bargains that underpin its growth in layman’s terms. It’s a valuable source for anyone trying to make sense of People’s Republic.
China’s foreign M&A spree has its own unique logic 17 Jun 2016 Chinese bidders are snapping up overseas companies with few obvious financial benefits. Three factors are at work. Some want to acquire technology and management expertise. Some see value compared with inflated asset prices at home. Others are just seeking trophy assets.
Review: Blockchain hopes go well beyond finance 10 Jun 2016 The distributed-ledger concept is linked to the bitcoin cryptocurrency, and more recently potential financial uses have taken wing. A new book, “Blockchain Revolution,” explores democratic and humanitarian applications. It’s both eye-opening and, at times, a bit wide-eyed.
Batteries will short-circuit old business models 16 Jun 2016 Cheap, powerful batteries are almost a mass-market reality. The U.S. storage market could grow 45 pct a year, as prices plunge. It’s great for green energy suppliers, and those who like clean air - but less so for old-school utilities, and possibly makers of batteries themselves.
ASML’s $3 bln deal is a big bet on tiny tech 16 Jun 2016 The semiconductor-equipment maker is buying Taiwan's Hermes Microvision. The target's sales have plunged and global chip demand is cooling. But ASML's biggest-ever deal should make it even more indispensable to manufacturers as they prepare to make next-generation chips.
Crown Resorts can shine brighter without Macau 16 Jun 2016 James Packer’s $6 bln casino business may split up. A big rally in its shares looks justified. Not only will the Australian group lift payouts and put hotels into a low-tax trust. The business will also get simpler and no longer be tied to China’s struggling gambling territory.
India’s bad loans get halfway house to bankruptcy 15 Jun 2016 The country’s central bank is giving lenders more flexibility to restructure troubled credits. Swapping some debt for equity gives them a better chance of rescuing viable businesses. The stop-gap is necessary because it will be several years until a new bankruptcy law kicks in.
Alibaba’s new candour is overdue but welcome 15 Jun 2016 The Chinese e-commerce giant has promised to shed more light on the financial performance of a range of businesses. That’s a relief for investors amid an accounting probe by U.S. regulators. A better-than-expected revenue forecast also helped ease concerns about slowing sales.