China catalyst could spark Syngenta chain reaction 13 Nov 2015 The Swiss pesticides group has rejected a $42 bln bid approach from China National Chemical Corp, reports say. Interest from rival Monsanto was rebuffed earlier this year, and last month the Syngenta CEO stepped down. It looks vulnerable to a round of chemical re-engineering.
Investors in China haunted by "key man" clause 13 Nov 2015 Creditors to mainland companies sometimes insist on repayment if a top executive leaves. The provision looks like prudent risk management but it can make a bad situation worse. Cement maker Shanshui, which faces liquidation amid a shareholder spat, is the latest to suffer.
Alibaba Singles’ Day frenzy confuses growth debate 12 Nov 2015 The Chinese e-commerce group processed transactions worth a staggering $14.3 bln on Nov. 11, 60 pct more than last year. Yet the boost is unlikely to have much impact on annual volumes. One day of online discount shopping also provides few clues about Chinese consumption.
Malaysia’s slashed oil dividend is still too high 12 Nov 2015 State-owned Petronas will cut next year’s payout by 40 pct to $3.7 bln. That’s painful for a country which depends on the group for one third of federal revenues. But unless oil prices recover, or Petronas cuts costs, it will have to dip into cash reserves to finance the payout.
Hadas: The BRICs are dead. Long live the BRICs! 11 Nov 2015 Goldman Sachs coined the acronym in the 2000s when Brazil, Russia, India and China promised the greatest economic shift in a century. Now Goldman is closing its flailing BRIC fund. But poor countries are still gaining on rich ones, and their base for growth is getting more solid.
Strategies diverge on China’s new web battlefield 11 Nov 2015 The country’s online giants are pouring cash into local services like taxi-hailing and takeaway food. Baidu invests mostly in wholly-owned units, while Tencent takes minority stakes. Alibaba does both. As costs mount amid uncertain returns, investors are happier with less risk.
Japan index: Abenomics falls in autumn 11 Nov 2015 Breakingviews’ gauge of Japan’s economic revival dipped in September as the current account surplus shrank while spending, consumer prices and share prices fell. Bank lending, manufacturing production and wages edged up slightly, but not enough to prevent an autumn slowdown.
China insurer adds U.S. to overseas M&A splurge 10 Nov 2015 Anbang has popped $1.6 bln Fidelity & Guaranty Life into its basket. In 12 months it has spent $4.4 bln on financial groups in South Korea, the Benelux and now America. The strategy is vague and funding opaque. For sellers, though, the Waldorf Astoria owner livens up any auction.
Aussie target Asciano could push for higher bid 10 Nov 2015 The ports and rail group is now fielding competing, $6 bln-plus takeover proposals from Canada’s Brookfield and a break-up consortium led by local interloper Qube. The target’s board may want to see a clearer gulf in value before hitching itself to Qube’s wagon.
Modi chooses awkward time for UK rock star welcome 9 Nov 2015 India’s prime minister will address a crowd of 60,000 at London’s Wembley Stadium this week. Courting the diaspora makes sense. But the rapturous welcome is out of tune with UK-India business ties and a big local election defeat at home, where Modi mania is definitely over.
China’s stock market marches to its own merry tune 9 Nov 2015 Mainland stocks are up more than a fifth since the end of September. International investors are less bullish. Even after the summer’s harsh lessons, Chinese buyers still pay more attention to cheap cash and state support than slowing growth and weak corporate earnings.
Richemont shows luxury doesn’t run like clockwork 6 Nov 2015 The Cartier owner reported a disappointing 3 percent increase in first-half sales. Hong Kong watch sales slumped. It’s tempting to look for economic trends, but the best explanation might just be that after a decade of runaway growth, luxury is returning to its old, faddish ways.
No knockout in Australia’s $6 bln waterfront brawl 6 Nov 2015 Canada’s Brookfield moved to salvage its takeover of Asciano, buying a 19 pct stake to match last week’s lightning raid by rival Qube. The Aussie challenger could hit back by making a full bid for the ports and rail group. Or antitrust referees could haul Brookfield away.
D-day nears for Tata Steel as Europe woes grow 6 Nov 2015 The Indian steelmaker has written off another $1.3 billion at its ailing European division. Under pressure from cheap Chinese imports, the unit’s EBITDA has turned negative. Tata will need to make tough choices about the business it bought in 2007 sooner rather than later.
Honda snub bursts Takata’s financial force field 5 Nov 2015 The Japanese carmaker will stop using air bag inflators made by its troubled supplier. The public rebuke from its biggest customer raises doubts about the future of Takata’s principal business. It also undermines investors’ assumption that the group is too important to fail.
StanChart shakeup turns screws on India’s tycoons 5 Nov 2015 The lender plans to offload some of its share of loans worth $3.5 bln to Essar Global. The steel-to-ports conglomerate backed by the Ruia brothers is one of India’s most indebted. It’s an overdue warning to the country’s tycoons that suppliers of cheap credit are becoming rare.
Japan Post’s red-letter day delivers a value gap 4 Nov 2015 Shares in the Japanese postal operator and its finance arms soared on their stock-market debuts. Low valuations, high yields and familiarity helped the $12 bln triple IPO to fly. Yet the share moves also reveal just how lukewarm investors are about the core postal business.
Singles’ Day spat shows Alibaba’s jealous side 4 Nov 2015 The Chinese e-commerce giant’s annual Nov. 11 shopping promotion has become a national festival. Now a smaller rival has accused Alibaba of bullying merchants into using only its platform. Market power may be good for driving sales, but not if it prompts regulators to weigh in.
StanChart faces years of pain for humdrum gain 3 Nov 2015 New CEO Bill Winters is dumping risky loans, cutting costs, and raising $5.1 bln in capital. He thinks the loss-making lender can rebound by serving affluent consumers in emerging markets. But even if all goes to plan, a modest 10 pct return on equity is still five years away.
Why China’s graft probes don’t rattle investors 3 Nov 2015 Corruption scandals would hammer shares in Western firms. Not so for those caught in China’s crackdown like Dongfeng and AgBank. That’s because the campaign is so sweeping, and targets people rather than companies. Besides, the whole market already suffers an integrity discount.