China house prices on brink of pessimism spiral 30 Sep 2014 As prices fall in most big cities, developers and banks are trying to lure buyers back to the market. But cheaper mortgages and less red tape are no match for sagging real price expectations. Short of giving cash to buyers, it is hard to arrest negative thinking once it sets in.
Hong Kong shreds hopes for orderly disorder 29 Sep 2014 Thousands of protestors have taken to the streets, at times clashing violently with police. Markets remain open, and the financial sector hasn’t been targeted directly. But the loss of control over a carefully planned disobedience movement has damaging long-term implications.
Yahoo may squeeze out a third activist helping 26 Sep 2014 Starboard’s Jeff Smith is following where Dan Loeb and Carl Icahn have trod before him. Ideas about buying AOL and spinning off Alibaba and Yahoo Japan tax-free aren’t exactly new. Yahoo’s discount valuation, however, might nevertheless benefit from the attention.
World should steel for peak China demand 26 Sep 2014 Chinese consumption of crude steel fell in August for the first time this century. Slowing housebuilding is adding financial strain to a troubled supply chain. A rethink of how much is enough for the world’s biggest steel user could also throw the global market off kilter.
Macau casino stocks facing slower-growth future 26 Sep 2014 The enclave’s gambling revenue has fallen for three months, even as hotels remained full and visitor numbers grew. China’s anti-graft crackdown and weak economy deterred high-rollers. Many won’t be back. Though mass-market gamers can keep Macau expanding, the pace will be slower.
Sinopec’s petrol station revamp is an uphill job 25 Sep 2014 The Chinese oil giant wants to sell more from its 23,000 pump-side stores. But even if non-fuel sales rise sixfold, the unit won’t be worth a lot more than the $58 billion valuation put on it by outside investors. Breakingviews’ calculator spells out the scale of the challenge.
Marissa Mayer stuck with worthless Yahoo rump 23 Sep 2014 Since she was named CEO in 2012, the internet company’s market value has roughly doubled to $38 bln. The problem is that a stake in Alibaba accounts for most of it, and Yahoo Japan and cash the rest. Mayer’s task now is to persuade investors to give Yahoo even some credit.
China rich list misses most valuable asset: status 23 Sep 2014 Tech stars like Alibaba’s Jack Ma and Lei Jun of Xiaomi dominate the ranks of China’s wealthy, closely followed by property magnates. But such measures are incomplete. Cash buys status for the lower ranks. For those at the top, political connections are the currency that matters.
Alibaba IPO highlights SoftBank’s value dilemma 22 Sep 2014 Following the Chinese e-commerce group’s listing, the Japanese conglomerate’s 32 pct stake is worth $75 bln. It eclipses the value of SoftBank’s core businesses. The near-5 pct drop in SoftBank’s shares after the IPO is a reminder the investment is both blessing and burden.
China’s jobs market in need of serious work 22 Sep 2014 The 9.7 million urban jobs created this year are a worthier achievement than any GDP growth rate. But in modern China good jobs matter as much as new ones. That calls for repurposing millions more workers from industry into services, and tackling some grave social injustices.
Magic word greed opens $228 bln Alibaba valuation 19 Sep 2014 The Chinese e-commerce giant led by Jack Ma saw its shares pop 36 pct at the open. Staggering growth and margins proved irresistible to global investors. The company’s cloudy governance, frenetic dealmaking and corporate structure could yet prove a trap.
GSK graft case raises risk for executives in China 19 Sep 2014 The drugmaker is paying a 297 mln stg fine for bribing non-government officials in China. That sets a floor for penalties in future probes. But the suspended sentences for five executives also send a warning that pain in such cases falls on individuals just as much as companies.
Australia at sharp end of China outbound ambition 19 Sep 2014 Growing ties to China are a source of anxiety but the lop-sided relationship is here to stay. As Chinese buyers widen their horizons from resources to property and education, Australians have a chance to show they’re pragmatic. Beijing could help too, with a touch of soft power.
China has not one property problem, but many 18 Sep 2014 Rank the biggest cities by riskiness, and huge differences become apparent. Some places face heavy oversupply, others look unaffordable, while in most prices are sliding. A national correction is unlikely, but a conflagration of local ones could be pretty nasty.
LinkedIn can woo the censors to connect with China 18 Sep 2014 The job-focused social network is fine-tuning censorship policies for its Chinese site, which blocks sensitive posts in the PRC. It’s a contrast with other Western internet firms which have been more reluctant to oblige the censors. Unlike Google, LinkedIn can afford pragmatism.
China stealth stimulus may slip down back of sofa 17 Sep 2014 A reported injection of $81 billion via big banks equates to less than a month of credit. It won’t restore rapid growth, but may help cash-strapped companies pay their bills for a while. High debt and low liquidity are forcing authorities into increasingly intricate manoeuvres.
India in depth: How not to get swamped by capital 17 Sep 2014 Japan wants to invest $34 billion in India. China’s pledge could be several times as large. Realizing these commitments, and digesting up to 12 percent of GDP in foreign capital over five years, will be tricky. The People’s Republic’s own growth strategy offers a useful template.
Alibaba’s small IPO hike leaves room for believers 16 Sep 2014 Boosting the maximum share price by 3 pct won’t affect appetite for the Chinese e-commerce giant’s $21 bln-plus offering. Investors appear more focused on Alibaba’s growth prospects than on governance risks. That points to a warm reception when it starts trading later this week.
China IPOs highlight nuclear power drive 16 Sep 2014 The People’s Republic wants to burn less dirty coal and not import too much gas. That’s why China is building half the world’s 63 new nuclear reactors. The listings of operators CGN Power and CNNC offer a way into the trend – for investors who can stomach the risk of a meltdown.
Sinopec $17.5 bln pump deal lacks reform drive 15 Sep 2014 The Chinese oil titan has sold 30 pct of its petrol station arm to 25 mostly-domestic investors. For them to get a good return, Sinopec’s convenience store sales will have to multiply. Yet the new shareholders have little retail expertise – and even less control over the unit.