China

AB InBev’s deal machine goes into smart reverse

19 July 2019

The brewer’s sale of its Aussie unit to Asahi for $11 bln will cut debt. The Japanese are paying a valuation less than AB InBev wanted from its botched Asia IPO but probably more than investors ascribed to the unit. It keeps the door open for boss Carlos Brito to try again.

Lufax sounds Beijing death knell for peer lenders

18 July 2019

China’s top peer-to-peer lender plans to exit the sector, the most telling sign yet that a regulatory crackdown could kill the industry. The Ping An unit and one-time IPO candidate can fall back on money management and other forms of lending. Rivals may be less lucky.

Fresh attack on China’s zombies can bury some

18 July 2019

Beijing officials are on a campaign to kill off moribund companies. Past versions of this familiar horror flick have ended with local authorities keeping state-owned groups staggering along anyway. But a healthier economy and big ambitions make this sequel worth watching.

Auto pessimism could be over-revved in China

17 July 2019

A grim start to the year saw sales slump by more than 10%. Chaos reigned amidst new rules, while Beijing remained reluctant to offer stimulus. But policy pressure is uneven, and the worst could be past: luxury brands and electric-car makers might be the first to pep up.

China’s Topsports takes eye off e-commerce ball

17 July 2019

Two years after a $6.8 bln buyout of Belle, the shoe retailer has unveiled IPO plans for its athletic-wear chain. A Beijing-backed fitness push should help sustain sales growth. A dependence on Nike and Adidas is a worry, though, as is the lack of emphasis on its online strategy.

Alibaba stock should have local staying power

16 July 2019

The New York-listed Chinese e-commerce titan may raise up to $20 bln in Hong Kong. Investors should be able to trade the shares between exchanges. So-called two-way fungibility has cost the Asian market liquidity in the past, but Alibaba’s regional appeal could be an exception.

Taiwan spat moves Corporate America to frontline

16 July 2019

A $2.2 bln arms deal has led to hints of Beijing retaliating against Honeywell and others. Companies have long been caught in geopolitical crossfire, but U.S. assaults on Chinese tech firms suggest both sides could deploy such weapons more often. Boards should prepare for battle.

Naspers’ double discount

15 July 2019

The South African group is spinning off its stake in China’s Tencent into an Amsterdam-listed subsidiary. Will this narrow the persistent valuation gap between the two?

Naspers hopes two discounts are less than one

15 July 2019

The South African group is persistently worth less than its $135 bln stake in Chinese web giant Tencent. Listing assets in Amsterdam might shrink the gap, but the parent will still suffer a markdown. Investors should only click “accept” if the combined shortfall is much smaller.

Morgan Stanley’s Asian crown gets Bud-shaped dent

15 July 2019

The Wall Street bank, along with JPMorgan, led AB InBev’s now-scrapped $9.8 bln listing of its Asia unit. The bankers either misread the market, or caved into the clients’ pricing demands. Either way, it takes the shine off Morgan Stanley’s local league-table pre-eminence.

Tencent holds key to China’s e-sports bonanza

15 July 2019

DouYu, which lets fans live-stream top video gamers, wants to raise $1 bln in a New York IPO. Competition for star players has crushed margins. Investors will bet backer Tencent, which also owns a stake in a rival, can limit the destruction and push for consolidation.

China’s stimulus bazooka best left in holster

15 July 2019

Growth slowed to 6.2% year-on-year in the second quarter, down from 6.4% in the prior three months. The economy is cooling, but not cratering. A Politburo meeting expected later this month will signal how Beijing plans to respond. The best option may be to keep extra powder dry.

The Exchange: Tiananmen 3.0

15 July 2019

Han Dongfang was expelled from China for organising worker protests that were bloodily suppressed in 1989. He founded China Labour Bulletin, which tracks factory protests, strikes and policy. He speaks with Pete Sweeney about the economic stress on workers and college graduates.

Thomas Cook wipeout forces Fosun to double down

12 July 2019

The ailing UK tour operator is finalising a 750 mln pound recapitalisation which would give creditors control of the airline and the Chinese group its travel unit. That allows Fosun to salvage its 250 mln pound equity stake. Other shareholders are likely to be left with nothing.

China’s awkward rate-setting status quo to persist

12 July 2019

The central bank may want to half-follow a U.S. rate cut expected later this month. Yet officials have been looking to scrap the benchmark rate that offers the most direct way to do so. With so much at stake, however, the current half-reformed setup could prove tough to shake.

Asia’s online gambling jackpot proves hard to win

12 July 2019

Web-based betting shops have been booming in the Philippines since local rules were reworked. Despite a glut of punters in the broader region, a market estimated at some $11 bln, seasoned operators have been hesitant to place wagers. For now, the regulatory odds remain too long.

Budweiser and Alibaba flag Hong Kong dollar oddity

10 July 2019

As the two companies kicked off plans to raise some $20 bln combined, the currency bounced. In a place where stocks are worth over 1,000% of GDP, local money demands can move markets. Former central banker Joseph Yam’s warning about the challenges of such a system look prescient.

Hong Kong chief’s humiliating retreat comes late

9 July 2019

Carrie Lam says her extradition bill is dead. The admission of failure is welcome but also overdue. She is bowing to get demonstrators off the streets; to regain the confidence of CEOs, investors and citizens, the city's leaders will have to show they are listening more closely.

Anta outruns short-sellers at surprising pace

9 July 2019

The $18 bln Chinese athletic-gear maker is under attack again, this time from Muddy Waters, which accuses it of fraudulently inflating profit margins. Despite an abundance of doubters, the stock is up a third this year. Resisting scepticism may be a less challenging sport.

Shanghai’s new board could lead to a bigger trade

9 July 2019

Suzhou HYC Technology became the first company to price an IPO on the hyped Star Market. Investors disappointed by similar past efforts will be waiting for more signs of success. They should have some soon, given it seems to be a prelude to liberalising China’s main exchanges.