China

China can afford to shrug off credit downgrades

21 September 2017

S&P just dinged the sovereign rating. Banks have been marked down too. Worries about rising debt are justified, but the market’s non-reaction shows how differently China’s economy is wired. State control and plentiful savings mean Beijing will escape most of the usual fallout.

Tencent heats up fintech fight with CICC stake

21 September 2017

The Chinese tech giant is taking a 5 pct stake in the investment bank. Tencent has already cut deeply into Alibaba's share of electronic payments. This will help Tencent grow in wealth management – and chip away at its archrival’s dominance of online money-market funds.

China “Belt and Road” waves red flag for investors

18 September 2017

Beijing’s vision of infrastructure connecting some 70 countries already has fund firms rushing to create vehicles to lure investment. But broad index ETFs miss that many projects make little commercial sense. Skeptical punters should focus on a narrower set of potential winners.

Market returns Best’s IPO plans to sender

19 September 2017

The Alibaba-backed logistics firm has cut the price of its New York flotation, and slashed the deal’s size to $495 mln, IFR reports. Best has belatedly recognised it was asking too much of investors, given the poor performance of rival ZTO, and its own evolving business model.

Foreign automakers will pay for Chinese EV drive

19 September 2017

China’s pledge to scrap gas guzzlers looks serious. A new quota system will force motor-makers to sell electric vehicles. Those who miss targets must buy credits from battery-powered rivals. Home-grown brands are likely to reap the benefits, at the expense of global giants.

Activist has fighting chance with China’s Sina

19 September 2017

U.S. hedge fund Aristeia is going after the $8 bln Chinese web company. Sina looks like a good target: it is clearly undervalued and its boss is not protected by super-voting shares. A big stake in microblogging affiliate Weibo offers some straightforward ways to create value.

Pirelli IPO leaves long-term questions unanswered

18 September 2017

The Italian tyremaker, sold to ChemChina in 2015, is seeking to raise up to $4 bln in a listing. A shift towards luxury tyres has boosted sales and margins. But growth targets look ambitious and there is no clarity on who will succeed long-term boss Marco Tronchetti Provera.

Fosun beats the odds with revamped Indian deal

18 September 2017

The Chinese conglomerate’s drug unit will buy a smaller 74 pct of KKR-backed Gland Pharma for $1.1 bln. That shows Beijing is still open to sensible foreign deals. And despite a recent border spat, India is open to Chinese money, especially if deals are carefully structured.

Viewsroom: Ray Dalio taps his inner communist

14 September 2017

Bridgewater’s founder thinks his kindred spirit resides in China’s anti-corruption czar Wang Qishan. Both seek radical transparency – though Dalio’s hunt is tied to forging a business in the Middle Kingdom. Plus: Exxon’s salvation may lie in the oil fields of West Texas.

Trump follows Obama’s lead on Chinese chip deals

14 September 2017

The U.S. president blocked a $1.3 bln takeover of Lattice Semiconductor. It’s not a new position: his predecessor was sensitive to Beijing’s ambitions and nixed a similar acquisition. With scrutiny likely to intensify, buyers and sellers can save face by rethinking these mergers.

Hong Kong is better off without dual-class shares

14 September 2017

Hong Kong’s securities watchdog has conceded in a battle for control over listing approvals, says the SCMP. Regulators can still reject proposals for unequal voting rights, which might lure tech IPOs at the expense of governance. But they'll need to get used to being unpopular.

Chinese web grocer’s IPO requires a strong stomach

14 September 2017

Food giant COFCO wants to raise up to $600 mln floating an online supermarket. Sales are growing as web shoppers splurge on fresh produce. But the group is investing heavily in logistics. Throw in a costly price war with Alibaba and others, and investor appetite may be lacking.

EU foreign investment review raises bar for China

13 September 2017

Brussels has proposed a pan-European scheme to vet sensitive purchases by other countries. Unlike the U.S., rulings will be non-binding. Even so, the People’s Republic will find it harder to buy up EU infrastructure and technology. It’s another reason for Beijing to open up.

New iPhones take features from Asia and add profit

13 September 2017

Apple's latest handset boasts a big screen, wireless charging, facial recognition and other upgrades. Much would be familiar to users of Samsung or Huawei phones. Apple's branding wizardry, price discipline and focus on richer customers set it apart when it comes to profit.

What’s with Ray Dalio’s Wang Qishan obsession?

12 September 2017

The Bridgewater billionaire says he gets "closer to cracking the unifying code that unlocks the laws of the universe" when he speaks with the anti-corruption czar of China's Communist Party. The odd confession may offer insight into Dalio's ardor for investing in China.

China’s “insurtech” star over-stresses the tech

12 September 2017

Banks underwriting Zhong An’s IPO value it at up to $12.9 bln, says IFR. The tech-style valuations assume years of fast growth for the group, founded by the chairmen of Alibaba, Ping An and Tencent. Ping An itself offers a cheaper way to play the same theme.

Beijing prepares to stand yuan policy on head

11 September 2017

Having spent years fighting off capital outflows, China is getting worried about inflows into a runaway yuan. Excessive currency strength could hurt exports and complicate deleveraging. Capping the rally without confusing the market will be quite a trick.

Rosneft sale deepens China-Russia co-dependency

8 September 2017

The world’s second-largest oil consumer and producer are tightening their embrace as CEFC China buys a $9.1 bln stake in Rosneft. A controversial debt deal with Intesa can be unwound and sellers Glencore and Qatar hang on to some upside. It's a better arrangement all around.

China’s grand plans help Advent to shore in Brazil

8 September 2017

The buyout firm is selling port operator TCP in a $1 billion deal. That is a good outcome after a recession and a currency rout, and the target fills a strategic gap for its Chinese state-backed buyer. China’s trading ambitions mean more overseas port deals should follow.

Insurance giants may get another chance in China

8 September 2017

The industry watchdog in Beijing is hinting it will further open the market for foreign firms like Chubb and Manulife. China’s market has long under-delivered for global insurers. After a recent shakeup of both the regulatory regime and business, this time may be different.