Yum’s China indigestion strengthens spinoff case 7 Oct 2015 The U.S. fast-food giant reported surprisingly slow third-quarter growth, due mainly to weak Chinese demand. That cut the stock price a fifth, and may derail Middle Kingdom expansion. Operations there have big upside, though, and liberating them now should top the company’s menu.
Samsung’s future is more Intel, less Apple 7 Oct 2015 The South Korean giant’s operating profit topped $6 bln in the third quarter – the first improvement since 2013. While smartphone sales are struggling, Samsung’s chip business is increasingly powering its bottom line. Future growth will depend more on components than handsets.
AirAsia buyout could fly with fancy 7 Oct 2015 Co-founder Tony Fernandes would need about $800 mln of additional financing to take the embattled budget carrier private. Though buyouts are rare in the cyclical industry, it could make sense for investors willing to bet on a Malaysian recovery and on oil prices staying low.
Thicket of bad economic ideas leads IMF astray 6 Oct 2015 The latest World Economic Outlook notes that reported growth is slowing, but cannot quite explain why. The picture would be clearer, and probably look brighter, if the IMF relied less on faulty measures like GDP and productivity. More attention to financial harm also would help.
European crisis will bend but not break Tata Steel 6 Oct 2015 The Indian steelmaker’s net debt of $9 bln is three times its market value. Its European business, acquired in 2007, is suffering from cheap Chinese imports. Yet last year’s timely refinancing and support from its parent means Tata Steel can avoid the fate of British rival SSI.
Trade mega-deal will go only so far economically 5 Oct 2015 The Trans-Pacific Partnership, assuming it overcomes opposition in U.S. Congress, should ease trade on everything from car parts to cancer therapies. China’s absence is significant but so is a U.S.-Japan deal. If NAFTA is any guide, however, the broad GDP impact may be limited.
Overseas investors fire warning at China Inc 5 Oct 2015 Hong Kong shareholders rejected China Merchants Bank’s employee share scheme after the lender gave them too little information. It’s a small sign big investors are turning less tolerant of shoddy governance. Chinese companies used to silent acquiescence may be in for a surprise.
Alibaba delivery arm is a financial blind spot 2 Oct 2015 The Chinese e-commerce group is a minority investor in the business that arranges delivery of billions of its packages. Yet Alibaba has spent over $6.3 bln on logistics-related deals in the past three years. Even if the investments make strategic sense, shareholders are in the dark.
New ANZ boss stuck in strategic mid-ocean 1 Oct 2015 Mike Smith is leaving as CEO of the $55 bln Australian lender after eight years. Beefing up in Asia has proved less lucrative than he hoped. Yet a slowing home economy and tightening regulation mean successor Shayne Elliott may have to stay centered somewhere in between.
Western Digital deal may thread U.S.-China needle 30 Sep 2015 The data storage company’s sale of $3.8 bln of stock to China’s Tsinghua exchanges a minority interest at a premium price for a seat on the board. Politics make selling control tough, but this kind of arrangement may help smooth Western Digital’s path in Chinese markets.
China criticism makes even Li Ka-shing defensive 30 Sep 2015 The Hong Kong tycoon has rejected accusations that he is turning his back on the mainland. Yet the fact he felt the need to issue a defence shows the hostile terrain now facing business leaders in China. Shrill allegations of treachery will only make them less willing to invest.
Alibaba Indian e-commerce scramble risks conflict 30 Sep 2015 The Chinese giant is investing at least $500 mln in Paytm, India’s top mobile wallet and wannabe marketplace. Alibaba already owns a stake in archrival Snapdeal. It’s odd for competing firms to share strategic investors. Consolidation may be the best way to manage the tension.
Yahoo’s Alibaba spinoff troubles may outlast boss 29 Sep 2015 Marissa Mayer plans to complete the internet firm’s separation from the Chinese e-commerce company. Resolving tax issues may take years, though, if authorities challenge the deal. With Yahoo’s business stagnant and competition rising, the CEO may be gone before wrangling ends.
Japan Tobacco gives Reynolds breath of fresh air 29 Sep 2015 The buyer is paying $5 bln for the overseas rights to the U.S. cigarette group’s American Spirit brand - a whopping 250 times earnings. It’ll allow Reynolds to exhale a cloud of debt as it focuses on U.S. sales. Its strategy is a handy guide for similarly challenged sectors.
Li Ka-shing’s power deal is at risk of a jolt 29 Sep 2015 The tycoon’s Cheung Kong Infrastructure unit wants to buy cash-rich affiliate Power Assets for $11.6 bln in stock. Investors have the motive and the means to push for better terms. But they need to believe the rewards of a sweetened offer outweigh the risks of Li walking away.
Abu Dhabi creates overhang risk for Malaysia bank 29 Sep 2015 Gulf fund Aabar may refuse to take up RHB Capital’s $565 mln rights issue despite owning one fifth of the lender. Though underwriters will step in, excess shares would weigh on RHB. The snub would also prompt worries Aabar may join foreign investors selling out of Malaysia.
Cameron, China and the missing pig semen 25 Sep 2015 The People’s Republic’s taste for hog DNA was touted as a 45 million pound win for UK trade back in 2013. Two years later, the results have fallen woefully short. Trade and investment are real, but the more important stuff happens when politicians get out of the way.
Modi offers Silicon Valley the welcome Xi won’t 25 Sep 2015 The Indian leader is visiting California days after his Chinese counterpart met U.S. tech bosses. Though India’s economy is smaller and harder to navigate, the door is open. For foreign players, India’s promised growth may outweigh China’s giant but hard-to-reach opportunity.
Japan’s new growth target worth taking seriously 25 Sep 2015 Prime Minister Shinzo Abe has pledged to expand the economy by more than a fifth. That looks fanciful with prices falling once again. A credible objective would need central bank support and better-defined tools. Even so, targeting nominal economic activity has merit.
Malaysia’s weak currency may power 1MDB cleanup 24 Sep 2015 The scandal-hit fund is seeking to ease its financial woes by selling power assets it bought for $2.8 bln. Despite the political storm and ownership limits, overseas bidders are interested. The falling ringgit, and 1MDB’s need to justify past deals, may give them the upper hand.