Beer megadeal could fuel a round of M&A in China 17 Sep 2015 Combining AB InBev with SABMiller would make waves in the world’s biggest beer market. The merged group might try to keep SAB’s stake in market leader Snow. That would force smaller rivals into defensive deals. Or local partner CRE could buy out SAB and lead consolidation itself.
China’s car-app war could end in Uber-Didi merger 17 Sep 2015 Uber’s Chinese unit and local rival Didi Kuaidi have raised a combined $4.2 bln this month to spend on subsidies to drivers. Now Didi has teamed up with U.S. competitor Lyft. But the battle is unsustainable. The obvious route to profitability is for Uber and Didi to join forces.
China brokers’ problems go beyond trading probes 16 Sep 2015 The president of CITIC Securities has been ensnared in an insider-trading investigation. That underscores how China’s stock slump has put brokerages in regulators’ sights. Still, collapsing trading volumes and forced stock-buying are a bigger threat to their bottom lines.
India tycoons defy deflating property bubble 16 Sep 2015 Mogul Cyrus Poonawalla’s $113 mln purchase of a Mumbai mansion is a new Indian house price record. But his zeal isn’t matched by the wider market, where a correction is underway. Sales to middle-income Mumbaikars are slowing, prices stagnating, and developers are burning cash.
Asset-stripping Yahoo could mean profitable relief 15 Sep 2015 The company’s plan to spin off its $25 bln Alibaba stake tax-free may not fly. Buying Yahoo and selling its parts – and taking the tax hit – would be brutal, but simpler and quicker than faffing about with clever structures. A 25 pct premium might still offer upside.
SoftBank’s stock market discount is here to stay 15 Sep 2015 Investors value Masayoshi Son’s tech conglomerate at around 36 percent less than the sum of its parts. Following Alibaba’s IPO, most of SoftBank’s worth is in shares of companies listed elsewhere. It’s hard to see what its billionaire founder and CEO can do to close the gap.
Aussie leader gets a bust, a boom, and a problem 15 Sep 2015 Mining has slumped while housing has surged. The biggest challenge for new Prime Minister Malcolm Turnbull is a slowdown in GDP that is depressing everything from taxes to profits. He needs to embrace higher public deficits – even if that’s tough for a conservative.
Aussie PM switcheroo is only start of challenge 14 Sep 2015 Malcolm Turnbull will need all his talents. The former tech entrepreneur and Goldman partner has come out on top but faces a wafer-thin majority, a faltering economy and ructions over refugees and climate change – not to mention a political class with a penchant for backstabbing.
China’s accidental austerity requires state action 14 Sep 2015 Swelling local authority debt and falling revenue are acting as fiscal speed bumps. Cutting interest rates would risk sinking the yuan and hastening capital outflows. The central government may need to put its spare borrowing capacity to work to support public spending.
Singapore’s big poll win creates room for economy 14 Sep 2015 Voters gave a thumbs-up to Prime Minister Lee Hsien Loong’s new, slightly left-of-centre policies, but rejected the opposition’s more populist agenda. Business is hurting, and the ageing city-state can’t afford fiscal excesses. It’s time to shift the focus to fading growth.
Google in China faces moral and financial hurdles 11 Sep 2015 Censors forced the web giant to retreat from the People’s Republic in 2010. Now it’s reported to be mulling a return with a Chinese version of its mobile app store. Harsh regulation would test Google’s principles, while fierce competition will make profit harder to come by.
1MDB crisis will weigh on sovereign investors 11 Sep 2015 The Malaysian outfit has spawned one of the sector’s worst scandals. Emirati backer IPIC could be on the hook for $7 bln. Neither is a typical sovereign wealth fund, and that is a large part of the problem. But the fallout could still affect their more traditional peers.
China’s jawboning is a poor substitute for reform 10 Sep 2015 Premier Li Keqiang told China’s version of Davos that growth remains on track. But botched moves in equity and currency markets have dented faith in China’s technocrats. Soothing words no longer cut it. Boosting confidence means enacting overdue reforms and rolling out stimulus.
JD.com doesn’t belong on the buyback bandwagon 10 Sep 2015 The Chinese e-commerce group has earmarked up to $1 bln for buybacks. After a selloff JD.com understandably wants to signal it is undervalued. But this is not a mature business throwing off cash: it’s still growing and investing, and only floated last year.
China carbon scheme another case of faulty markets 10 Sep 2015 It’s not just stocks and exchange rates that are proving hard to control. Seven pilot schemes for trading carbon dioxide emissions are floundering due to cheap permits, low liquidity and flexible deadlines. In this case, state intervention may be better than supply and demand.
Bombardier steers clear of China turbulence 9 Sep 2015 The Canadian plane maker rejected an $8 bln offer for its rail unit from a state-controlled Beijing firm. Listing a minority stake is a politically easier way to reduce some balance sheet strain. Bombardier is in the wrong business, though, to be playing it financially safe.
FX rules can’t protect investors from themselves 9 Sep 2015 Central banks are working on clearer guidance about what is and isn’t acceptable behaviour in the $5-trillion-a-day currency markets. Codes of conduct are helpful, but how they are enforced also matters. So does investors’ willingness to do their homework and pay realistic fees.
Yahoo headaches stretch beyond Alibaba 9 Sep 2015 The U.S. taxman won’t bless the Internet company’s plans to spin off its $23 bln Alibaba stake in a tax-free transaction. Yahoo may still push its case but the roughly 60 pct discount attached to this stake implies the plan is troubled - as is the company’s core business.
Japan index: Bonus bounty lifts sluggish economy 9 Sep 2015 The Breakingviews Abenomics index perked up in July, as summer bonus payments boosted wages. But a muted recovery in consumption, weak manufacturing and slumping housing starts point to anaemic demand both at home and overseas. Expect calls for fiscal stimulus to grow louder.
Li Ka-shing’s power deal is a tidy-up too far 8 Sep 2015 The Hong Kong tycoon wants his CKI unit to buy the rest of $18 bln affiliate Power Assets. Li’s latest restructuring would create a simpler, cash-rich firm with lots of M&A opportunities. But the all-share, no premium tie-up doesn’t look great for Power investors.