Lagarde faces quadruple challenge at IMF 11 Feb 2016 Christine Lagarde’s second term at the helm of the international lender will be no more relaxed than the first. Low oil prices are pushing some energy-producing nations to the brink, markets are in turmoil, and she has unfinished business in Greece. Then there’s China.
Adtech deal arms China’s web groups against giants 11 Feb 2016 A consortium including search specialist Qihoo and gaming firm Kunlun are bidding $1.2 bln for Norway’s Opera Software. Despite a fat premium, the offer is not overly pricey. Plus, Opera could help the buyers move into lucrative niches not yet taken by Baidu, Alibaba or Tencent.
Breakdown: The cost of China’s capital outflows 5 Feb 2016 Foreign currency reserves shrank by $513 bln last year, reversing two decades of cash flooding in. The decline has spooked global markets, put pressure on the yuan and prompted a renewed rush for the exits. Breakingviews looks at the causes and consequences of the exodus.
China’s record waste deal is far from rubbish 5 Feb 2016 State-backed Beijing Enterprises is buying Germany’s Energy from Waste for $1.6 bln. Unlike some of China’s splashier foreign deals, this looks decently priced and makes obvious strategic sense. China badly needs more clean-technology expertise. Expect more trashy buys.
ChemChina can reap rewards of new stance on GMOs 4 Feb 2016 Buying Syngenta will thaw China’s hostility towards genetically modified organisms. Nationalist fears about food safety will ring hollow once the seeds are in Chinese hands. The buyer will be able to push into a huge new market – but so, in time, will rivals like Monsanto.
Syngenta up against element of regulatory surprise 3 Feb 2016 The Swiss seed maker says its $43 bln sale to ChemChina shouldn’t raise U.S. national security fears, despite hot-button facets like chemicals, food and China. Yet Philips’ blocked lighting-unit deal shows Uncle Sam can veto without explanation. That’s reason enough to be wary.
Syngenta deal has two big winners, 1.4 bln losers 3 Feb 2016 ChemChina’s $43 bln cash takeover of the Swiss seed maker won’t involve job cuts, management sackings or cheeky tax reduction. Great for Syngenta shareholders and employees; not so for the buyer. Fortunately, the cost is spread widely – among China’s unwitting savers.
Troubles in China add to Lenovo’s growth worries 3 Feb 2016 The Chinese tech group’s revenue fell 8 pct to $13 bln in the three months to December as demand for PCs and smartphones slowed. Lenovo also faces fierce competition at home from the likes of Huawei and Xiaomi. Even though it is slashing costs, margins will remain under pressure.
LVMH shows there is life after China 3 Feb 2016 Sales at the French luxury giant grew a smart 6 percent in 2015. Jewellery and perfume were standouts. The Dior owner’s shares have taken a sharp tumble since China stock market jitters roiled the sector in August. These results suggest the discount is overdone.
ChemChina megadeal will need FrankenFinancing 3 Feb 2016 A near-$44 bln takeover of Swiss agribusiness Syngenta would be one of the biggest deals ever struck by an unlisted buyer. That calls for a monstrous funding package. The target could probably shoulder $16 bln or so of new debt. Big Chinese banks will also need to step up.
Chinese investors get limited moral hazard lesson 3 Feb 2016 Almost a million people lost $7.6 bln in a Ponzi scheme run by peer-to-peer lender Ezubao. The episode sends an overdue message about the perils of risky investments. But it’s at odds with official support for dodgy products issued by banks - and for stock market investors.
ChemChina’s Syngenta bid is prickly for Monsanto 2 Feb 2016 The state-owned group is nearing a $42 bln deal for the Swiss seeds and pesticides group. The cash and friendly nature make it better than a similarly valued offer from Monsanto. The U.S. company could improve its bid or turn its attention to BASF. Neither M&A option looks easy.
China index: Xi’s annus horribilis 1 Feb 2016 Breakingviews’ Tea Leaf Index may have ended the year on a modest high, but a look back over 2015 shows China’s economy moving slowly. Sagging steel production, exports and rail freight contributed to the lowest 12-month average since President Xi Jinping first took office.
Alibaba offers two insights into China economy 28 Jan 2016 The e-commerce giant’s third-quarter revenue rose 32 pct, above expectations. It shows China shifting to more consumption. But it also shows that Alibaba, like China, needs new ways to grow. Forays into local services and the cloud make it a less useful proxy for the consumer.
Zoomlion’s U.S. tilt shows power of state support 28 Jan 2016 The Chinese machinery maker’s $3.3 bln approach to rival Terex defies financial logic, but could make political sense. Beijing makes no secret of its desire to build global brands. Giving Zoomlion the green light suggests it has official backing to be one of China’s flagbearers.
AgBank scam gives Chinese banks new risk black eye 26 Jan 2016 Agricultural Bank of China is trying to track down $595 mln missing in Beijing. Though it’s a tiny fraction of the state-owned behemoth’s balance sheet, suspected embezzlement is another reason to doubt risk controls. The only benefit is that expectations are already low.
Philips’ failed deal puts Chinese bids in the dark 22 Jan 2016 The Dutch firm’s sale of 80 pct of its specialty lighting arm to a Chinese fund has failed on U.S. security fears. Philips’ Lumileds unit has tech smarts and stateside operations, but this looks like regulatory overreach. Pending Chinese bids for hardware now seem less certain.
China’s online arms race shows no sign of cooling 20 Jan 2016 Meituan-Dianping has raised $3.3 bln – a huge sum for a startup. The group deals site was created from a merger that was meant to curb brutal competition in China. But this new warchest, plus the huge resources of rivals like Alibaba, suggests the subsidies will keep flowing.
China’s foreign M&A can keep defying gravity 20 Jan 2016 A $10 bln splurge this year on outbound deals, stretching from ovens to gay-dating apps, contrasts sharply with the global shortfall of confidence in China. Local firms remain well-funded and keen to diversify. Absent a real financial crisis, or a state veto, deals will continue.
China’s just-so growth no balm for slowdown fears 19 Jan 2016 The world’s second-largest economy grew 6.9 pct last year, in line with government targets. The official picture of a gradual slowdown is at odds with market jitters. Yet the numbers do little to ease investors’ key concerns: yuan devaluation and the risk of a messy debt crisis.