Qihoo’s $10 bln buyout tests take-private trend 18 Jun 2015 China’s number two search engine is the latest group to turn its back on the U.S. stock market. Like smaller peers, it’s probably hoping for a higher valuation at home. The switch may work if minority shareholders agree. But it’s hard to see bigger Chinese groups doing the same.
Edward Hadas: Bring on kitchen economics 17 Jun 2015 A distinguished professor accuses his academic opponents of “mathiness”. It is wrong to use fancy formulas to justify intellectual prejudice. The discipline is poisoned by models created with mathematical abstractions. Equations muddy almost all economic debates.
China’s stock boom is not so different this time 17 Jun 2015 Soaring share prices evoke memories of the market’s rapid rise and even swifter collapse between 2006 and 2008. Corporate reform hopes, hyperactive retail investors and faith in state support are recurring themes. The differences aren’t big enough to suggest a happier ending.
China mixes up crowdfunding and groupthink 17 Jun 2015 Helping small companies raise equity online promotes innovation and indulges the Chinese dream of getting rich quick. Alibaba and JD.com are getting in on the act. But as property developers join in, crowdfunding may become a way to get the public to provide a financial lifeline.
Fed might fret about emerging market "spillback" 16 Jun 2015 Weak investment and import demand in developing nations is threatening to drag down U.S. growth just as the Federal Reserve mulls raising interest rates. The central bank was able ignore the effects of its bond-buying on others. But a spillback could choke the American recovery.
Legend’s financial crown jewel too well hidden 16 Jun 2015 The $2 bln IPO of Lenovo’s parent offers a stake in the computer-maker and a mish-mash of other assets. The Chinese group’s stake in a private equity fund is the biggest prize, but sifting through dental clinics, blueberry farms and property is asking too much of investors.
Vedanta could pay more for Cairn India 15 Jun 2015 The debt-laden Indian miner wants full control of its cash-rich oil subsidiary. The fate of the $2.3 bln all-share bid hangs on Cairn’s two big outside investors. If they object, Vedanta could afford to lift the skinny 7.3 pct premium by paying more in preference shares.
How to tell if Japan’s shareholder love-in is real 15 Jun 2015 Japan Inc. faces unprecedented pressure to get leaner, better-run, and more profitable. Real success means higher returns on equity. First comes a tough AGM season that could embarrass the likes of Sony and Sharp. Then expect more buybacks, stake sales, activism and M&A.
Can countries rebrand themselves like companies? 12 Jun 2015 A Lazard-WPP partnership to create “nation branding programs” raises the question. It’s one thing for a cheese or booze maker to become Mondelez or Diageo, quite another for despotic regimes or broken economies to simply rename themselves. Our columnists take a stab at a few.
Return to China tough for American orphan stocks 12 Jun 2015 Soaring home markets are prompting Chinese companies to delist from U.S. exchanges. The likes of social network Renren and data centre group 21Vianet may hope for higher valuations in China. But rigid rules make mainland listings harder. Only the unloved will attempt the journey.
Japan index: Weak consumption reins in recovery 12 Jun 2015 The Breakingviews Abenomics Index rose for a second straight month in April as a weak yen prompted exporters to boost production. But domestic consumer demand remained tepid: even with wages starting to improve, the year-long slump in spending shows little sign of easing.
Hardball Samsung move sets up chaebol reform test 11 Jun 2015 Samsung C&T has sold a 6 pct stake to a friendly party to neuter opponents of its $10 bln merger with the South Korean conglomerate’s holding company. Official reaction to the underhand maneouvre will show whether the country really wants to rein in its large corporations.
Kiwis teach Koreans a lesson on inflation targets 11 Jun 2015 Both New Zealand and South Korea have cut interest rates by a quarter percentage point. But while Governor Graeme Wheeler reacted to just six months of sluggish prices, Korean inflation has been below target for three years. Timidity has been the central bank’s biggest failure.
Tokio Marine learning lessons in value destruction 10 Jun 2015 The 38 pct premium the Japanese insurer is paying in its $7.5 bln purchase of HCC is only half as absurd as in its two previous U.S. deals. Those extravagant forays should give it scope to cut costs. By slicing 15 pct of HCC’s overhead it might even finally make a deal stack up.
MSCI lets fund managers ignore China a bit longer 10 Jun 2015 The index compiler says China’s $10 trln stock markets aren’t quite ready for global benchmarks. That’s a relief for investors worried about inflated mainland valuations. But inclusion is only a matter of time. Being underweight will soon be a matter of choice, not inertia.
China’s latest developer rescue plumbs new depths 10 Jun 2015 Renhe’s model of turning bomb shelters into malls has run aground. Now it is buying farmers’ markets for $839 mln, to bring in enough cash to keep the lights on. The catch: it’s buying at a premium from the chairman’s wife. Shareholders might hate it, if they had an alternative.
Nestle India strung out by noodle scare 10 Jun 2015 Worries about lead levels in instant noodles wiped up to 21 pct off the value of the Swiss giant’s Indian unit. Investors seem to fear permanent damage for a company already struggling with weak volumes. Even if Nestle can win over regulators, the road to recovery may be long.
HSBC continues to wind back the clock 9 Jun 2015 Four years since he started pruning the bank, CEO Stuart Gulliver is cutting risk-weighted assets by a quarter and shedding 50,000 employees. HSBC is returning to its roots as an Asia-focussed trade lender, though investors will have to wait almost three years to feel the effect.
Chinese broker cashes in on doped-up stock markets 9 Jun 2015 CITIC Securities could raise $5 bln in a beefed-up Hong Kong share sale. China’s biggest broker is touting more margin financing business and a new strategic partner. Those benefits, plus the country’s stock boom, have anaesthetized investors against the pain of dilution.
New debt rules squeeze India’s crony capitalists 9 Jun 2015 Lenders will now be able to convert debt into a controlling equity stake in failing companies. It sounds like basic capitalism. But in India’s skewed system, the relationship between banks and borrowers is more complex. The central bank’s move is necessary micro-management.