China “super-regulator” no match for foreign peers 26 May 2016 The People’s Republic may create a more powerful financial watchdog with the teeth to prevent a repeat of last summer’s policy missteps. The new body would boost policy coordination. But the power of top party leaders and provincial officials means it will still lack real bite.
Russia’s show of financial power fails to convince 25 May 2016 Moscow is selling its debt to foreigners and lending $25 bln - 2 pct of domestic GDP - to Egypt for a nuclear plant. Such shows of financial strength are all well and good. But the debt sale isn’t quite what it seems, and lending big sums at sub-market rates is risky.
Sony’s lowball forecasts are oddly reassuring 25 May 2016 Shares rallied despite a profit outlook that fell below expectations. Setting $1 bln of quake damage aside, the Japanese group is faring well. Consoles are humming along, handsets are stabilising, and a duff project has been nixed quickly. Sony’s turnaround is almost complete.
India’s $120 bln of bad debt is ripe for picking 25 May 2016 Global funds such as KKR and J.C. Flowers are eyeing stressed assets. Indian authorities are pressuring lenders to acknowledge bad loans and, in turn, raise capital. A new bankruptcy code helps too. After years of false starts, India’s bad debt business could finally take off.
Toyota, VW jump on cartech desperation bandwagon 24 May 2016 The Japanese automaker’s deal with Uber and its German rival’s with Gett come after GM invested in Lyft and Fiat Chrysler hooked up with Google. Each can learn from the other, but the technologists see opportunity while the manufacturers have more to fear about their fate.
1MDB scandal stings Singapore’s banking pillar 24 May 2016 The city has shut down BSI as Swiss authorities open a criminal probe into the private bank relating to the Malaysian state fund. The battle against illicit money flows is global. But Singapore is only now properly facing up to the risks of its push into wealth management.
Supercell sale would mark reboot for SoftBank 24 May 2016 Chinese giants are reportedly circling the SoftBank-owned developer of mobile gaming hits like Clash of Clans. A $5 bln-plus sale would seal a good return. It would also suggest President Nikesh Arora is making SoftBank more disciplined about selling, as well as buying, assets.
Tata’s portfolio power still just about adds up 24 May 2016 Problems at its British steel unit raise questions about the direction of India’s most respected conglomerate under Chairman Cyrus Mistry. The performance of the group’s other big listed companies has been a mixed bag. But viewed as a collective, Tata’s performance stacks up.
Resurgent dollar could revive emerging market fear 24 May 2016 Comments by U.S. Federal Reserve officials have fuelled expectations of an earlier rate hike. That could put renewed pressure on emerging market currencies and capital flows. Fears about China’s slowdown are also due for a comeback. Investors should brace for a stormy summer.
Takata’s funding drive will be a hard sell 23 May 2016 The Japanese auto-parts maker wants financial help to ride out its air-bag recall crisis. A few turnaround investors and industry peers will probably look. But huge unanswered questions about liabilities, prospects, and relations with big carmakers make clinching a deal tricky.
Yum’s China split doesn’t look too tasty right now 23 May 2016 The KFC owner’s break-up plan was a sensible victory for activists. But worries about China mean this hasn’t yet done much for shareholders. With one of Yum China’s most logical partners walking away from a pre-spinoff investment, it may be even longer before value is created.
Cheap oil pays mixed dividends for Asia 23 May 2016 The region’s consumers gained surprisingly little from cheaper crude. That’s partly because it reflected deficient global demand, which hurt exporters in China, Korea and Taiwan. Meanwhile, governments in India and Indonesia pocketed the windfall by slashing generous subsidies.
Richemont accepts new tempo for luxury watches 20 May 2016 The Cartier owner faces a drawn-out downturn in demand. April sales fell 15 percent, even compared to a terrible 2015. The Swiss group can cut costs, but the bigger problem is that luxury watch demand is less resilient than it once seemed.
Oilmen fix smart $2.2 bln deal in Papua New Guinea 20 May 2016 Oil Search’s offer to buy InterOil is canny and opportunistic. The buyer will only pay later for future gas discoveries. An agreement to sell a big chunk straight on to France’s Total also cuts the chance of a rival bid. It leaves InterOil investors with an unattractive choice.
Chip deals will set tone for Taiwan-China ties 20 May 2016 New president Tsai Ing-wen will soon decide whether to approve investments worth almost $1 bln by a Beijing-backed group. China’s push into semiconductors is a challenge for Taiwan’s tech-dependent economy. The outcome of the stalled deals will shape broader economic relations.
Robots are more solution than problem for China 20 May 2016 Factory jobs have lifted millions from poverty, and China is obsessed with social stability. Despite that, a huge push to upgrade via automation still makes sense. The workshop of the world is inefficient and low-tech, and the workforce is already shrinking.
BASF best leaving Monsanto seeds for the birds 19 May 2016 Bayer’s bid for the U.S. seed maker puts its German rival on the spot. Monsanto and BASF work together on research and there are few other potential merger partners. Yet the maths of a $50 bln-plus counterbid would be a stretch. BASF has sat out other big deals; it can again.
Tencent can shield itself from ad slowdown 19 May 2016 The Chinese gaming giant warned a slowing economy may clip its fast-growing advertising business. But soaring revenue from mobile games, which topped $1.3 bln in the first quarter, cushions the blow. Besides, unlike rivals Alibaba and Baidu, Tencent relies less on ad dollars.
India’s new payment banks will find profit elusive 19 May 2016 Telco operators, a conglomerate and a startup backed by China’s Alibaba are getting ready to launch new banks to serve the country’s poor. Tight regulation and fierce competition mean it will be hard to make money. Deep pockets will determine who survives.
China’s $5 bln robot bid does not compute 18 May 2016 The 36 pct premium Midea may offer for German robot maker Kuka is frothy. There are no cost synergies, the suitor doesn’t seek control, and governance could be messy. Yet unless Kuka can find a white knight, minority shareholders have every reason to take the Chinese cash.