China’s draconian IPO rules squeeze foreign banks 3 Aug 2016 Local media say the securities watchdog may seize licences from brokerages that don't properly audit firms that come to market. Other recent rules leave underwriters exposed to botched listings. That might help cut the IPO backlog. It also further sidelines foreign banks.
Regions will shore up China’s smaller banks 2 Aug 2016 Risk is mounting at midsized lenders, and capital buffers are eroding. Beijing wants to rein the upstarts in, but provinces need regional financial champions to keep lending. As Industrial Bank raises nearly $4bln from backers in Fujian, expect others to follow suit.
Uber can take fight for rest of Asia up a gear 2 Aug 2016 After folding its China unit into rival Didi, the ride-hailing app can compete harder elsewhere in Asia. It is less far behind India's Ola and Grab in Southeast Asia. Uber must balance the conflicts this could create with Didi with the need to show global growth.
Uber and Didi carve up antitrust arbitrage 1 Aug 2016 Economies of scale help ride-hailing apps gain dominance. By trading its Chinese unit for a stake in local rival Didi, Uber is creating value but also conflicts of interest. Lags in antitrust law are one more aspect of regulation for Uber - and others - to take advantage of.
Uber reverses out of dead end in China 1 Aug 2016 The U.S. ride-hailing app is handing Uber China to larger local rival Didi Chuxing. In exchange, Uber gets 20 pct of an enlarged $35 bln group. It's a humiliating reversal after a high-profile battle. The combined group can cut back on subsidies and focus on turning a profit.
Chinese investors up the ante in online games 1 Aug 2016 Gaming outfit Shanghai Giant, Alibaba boss Jack Ma, and partners are buying Israel's Playtika for $4.4 bln. This looks pricier than Tencent's recent purchase of the firm behind Clash of Clans. Plus, casino-style games are even more at risk of being overtaken by the latest hit.
Fosun’s deleveraging story strains credibility 1 Aug 2016 The Chinese conglomerate plans to offload up to $6 bln of assets by end-2017 to shore up its credit rating. Yet it has just unveiled new deals worth one quarter of that. Fosun is saying one thing and doing another. It may also find it easier to buy trinkets than to sell them.
Theresa May may have saved EDF from itself 29 Jul 2016 The state-owned French utility’s 12 bln pound investment in nuclear reactors at Hinkley Point could unravel after the UK’s new prime minister initiated a surprise review of the high-risk, high-cost project. Pulling the plug would do UK taxpayers and EDF shareholders a big favour.
Baidu’s ad recovery is a work in progress 29 Jul 2016 Earnings at China's top search engine fell by over a third in the second quarter after a crackdown on healthcare advertising. Baidu says the setback is temporary and margins will recover. But other parts of its search business are vulnerable too. Investors may be too sanguine.
India pharma deal suggests Fosun is an M&A junkie 29 Jul 2016 The Chinese conglomerate's drug unit is buying India's Gland Pharma for up to $1.3 bln. Shortages should boost prices of injectable drugs in the U.S., a key market for the KKR-backed group. Either way, Fosun's latest deal binge jars with its promise to cut debt.
UK banks can take heart from May’s radio silence 28 Jul 2016 The UK prime minister has so far avoided references to the financial sector. The silence may herald industry taxes to plug Brexit-linked revenue losses. But it might not, and UK lenders have less to fear on capital demands, structural separation and interest rates.
China’s bank watchdog is pushing on a balloon 28 Jul 2016 Regulators may restrict smaller lenders from the riskier parts of the $3.5 trln market for wealth management products. That would protect savers and limit the hazards caused by repackaging loans as short-term investments. Banks will probably just search for new loopholes, though.
Fast is the enemy of good in UK trade talks 27 Jul 2016 Britain is eager to sign up willing free-trade partners for when it detaches from the EU. China, a dab hand at drawing up lopsided pacts, could be a quick win for Theresa May's government. The risk is that the United Kingdom ends up with a deal that binds rather than benefits.
Vizio buy stars China’s latest breed of web giants 27 Jul 2016 LeEco is buying the U.S. TV-maker for $2 bln. Little known outside of China, Jia Yueting's tech group is trying to take on Netflix, Apple and Tesla all at once. The unabashed global ambitions make it different from more established Chinese giants like Alibaba and Tencent.
AB InBev adds dash of cynicism to raised SAB offer 26 Jul 2016 A raised 79 bln pound offer for SABMiller should give agitating hedge funds a dignified exit. But it mostly ignores the fall in the value of the Budweiser brewer's offer - and makes a share-based alternative offer targeted at SAB’s biggest shareholders slightly more attractive.
China insurers’ worst habits go almost unchecked 26 Jul 2016 The insurance watchdog is looking for trouble in the wrong places. It is warning over the industry’s riskiest investments from corporate raiding to big M&A. But it could do more to rein in the high-yielding products insurers offer that underpin the hunt for outsize returns.
Baidu video drama has better-than-expected finale 25 Jul 2016 The CEO of China's top search engine has scrapped a $2.8 bln bid for the group's video arm days after an investor voiced concerns. Selling the loss-making unit would have boosted margins. But shareholders had little insight into the unit's prospects or the boss's motives.
China’s bondholders won’t go down without a fight 25 Jul 2016 Investors are confronting the Chinese province of Liaoning over the latest default by Dongbei, a troubled steelmaker. With defaults by state-backed firms escalating, expect more bitter rows like this – especially if debt holders can successfully take on Liaoning in court.
China Film IPO is a remake investors can skip 22 Jul 2016 A listing of the state-owned movie distributor could value it at up to $2.4 bln. As growth slows in its core business, China Film wants to be a big player in movie production and cinemas. But it will be tough to catch up with giants Wanda and Alibaba in such vertical integration.
UK’s currency pounding cracks door wider for yuan 22 Jul 2016 Chinese state media have griped that last month's Brexit vote hobbles London's ability to help internationalize the yuan. But there are pluses, too. For one thing, the sterling selloff has made the free-floating democratic pound look a lot less safe next to the steadier renminbi.