Chinese loans are building a bridge to nowhere 17 Feb 2014 Banks lent like crazy in January. But why? The fight for deposits looks ever fiercer, and growth in a narrow measure of money supply was the lowest on record. Add in poor economic signs, and the explanation seems to be that productive lending has given way to extending.
From soccer pitch, lessons on Chinese tycoon risks 14 Feb 2014 As trophy hunters flash more cash overseas, the sale of 12 pct of Birmingham FC by a Hong Kong tycoon to an obscure Chinese entity offers a cautionary tale. Having a big personality as a big shareholder is risky, but Chinese buyers bring extra anxieties.
Lenovo’s turnaround trick will be harder this time 13 Feb 2014 Buying IBM’s PC unit launched the Chinese group onto the global stage. Absorbing Motorola poses a similar challenge with a smaller upside: the U.S. handset maker is no longer a brand leader. Cost savings and scale should help reduce losses, but Lenovo’s timeline is ambitious.
Alibaba tests the limits of non-bank banking 12 Feb 2014 The Chinese e-commerce group allows customers to save with interest, make investments, and take out loans. In theory, this enables it to challenge China’s banks with no liquidity risk and minimal exposure to bad debts. However, customers and regulators may feel differently.
Alibaba’s $1.6 bln map deal fuels online land grab 11 Feb 2014 The Chinese group offered a 39 percent premium for the 72 percent of online mapper AutoNavi it doesn’t already own. There’s strategic logic, but the real motive may be keeping up with rivals Baidu and Tencent. Location-based services are hot, but profits are hard to pinpoint.
China’s "biggests" come early, late or not at all 7 Feb 2014 Recent superlatives include top red wine consumer, car purchaser and oil importer. Being the biggest brings China investment, but can also be a sign of inequality and inefficiency. Meanwhile, some coveted firsts still look a long way off.
China index: Searching for signs of a slowdown 7 Feb 2014 Weak data from China has exacerbated emerging market concerns. Despite a monthly decline, our updated index shows things aren’t terrible - property sales and freight volumes grew. But exports look weak and slow truck sales suggest sluggish domestic demand.
Chinese e-commerce IPO more Amazon than Alibaba 6 Feb 2014 JD.com has filed for a U.S. listing ahead of its bigger rival. The online retailer has a different strategy and is barely breaking even. Like its Seattle role model, the bet is that expansion now leads to future earnings. To keep growing, JD.com will need capital to keep flowing.
Smog obscures looming water risk for China 4 Feb 2014 Bad air is visible, and vexes the urban rich. But recent attempts to fix China’s airpocalypse may exacerbate another acute risk: water. Thirsty energy companies and consumers may not see the threat just yet; they will if policy and price changes pull the plug on cheap supply.
Chinese M&A rings in new year with Auld Lang Syne 31 Jan 2014 The $2.5 bln sale of Cooper Tire was undermined by its joint-venture partner in Rongsheng. The two sides have now agreed a deal that helps them part ways. Given what transpired, other foreigners may also fancy singing “should old acquaintance be forgot” in the Year of the Horse.
Lenovo’s M&A spree challenges investors’ faith 30 Jan 2014 The Chinese group is buying Google’s Motorola phones just days after picking up IBM’s low-end server unit. The two loss-making divisions will cost up to $5.2 bln. Though there’s some strategic logic, shareholders have few details to help them work out whether the deals stack up.
ICBC takes slow-burn approach to global expansion 30 Jan 2014 The Chinese lender is buying 60 pct of Standard Bank’s UK trading business. Negotiations took over a year, and ICBC has over a decade to take full control. Slow decision making can mean missed opportunities, but caution may protect China’s banks from high-profile own goals.
Google salvages insurance from its biggest deal 30 Jan 2014 Selling Motorola Mobility to Lenovo for $2.9 bln after buying it for $12.5 bln barely two years ago looks awful. The search giant extracted some value, however, and is keeping loads of patents. The deal was still costly, but it did find a kind of protection for the Android world.
Apple numbers show scale of China challenge 29 Jan 2014 Disappointing global sales increase pressure on the iPhone maker to gain ground in the People’s Republic. A deal with China Mobile helps. But lifting China market share to just 10 percent requires a 75 percent jump in orders this year. Lower-cost rivals make that a tall order.
Chinese online gaming stocks ripe for U.S. exit 29 Jan 2014 Shanda Games’ biggest shareholder is leading a $1.9 billion bid to take the Nasdaq-listed game developer private, valuing it at 7 times forecast earnings. Giant Interactive’s board is mulling a similar offer. Other cash-rich and lowly-valued rivals may be tempted to follow.
Proof of potash cartel revival will be in pricing 27 Jan 2014 New Kremlin-backed owners at Russia’s Uralkali, the world’s biggest potash producer, appear open to reviving a marketing alliance with Belarus. But it’s far from a done deal. Even if the cartel returns, it’s unlikely to survive long once BHP Billiton enters the business.
Markets could be their own worst enemy in fear binge 27 Jan 2014 A predictable Argentine crisis and an expected Chinese slowdown triggered panic selling in lower quality assets. As yet, it’s just catchup with imperfect reality. But if investors don’t calm down - and central banks stay still - markets could spark the crisis they fear most.
China falls prey to its own capital magnetism 27 Jan 2014 Central bankers are worrying that cash is flooding in. Porous capital controls are part of the problem. But by keeping its exchange rate suppressed and using higher interest rates to curb risky shadow banking activity, China has made itself into a big speculative bullseye.
Dual-currency IPO benefits everyone but investors 27 Jan 2014 Chinese pork producer WH Group may offer new shares in both Hong Kong dollars and yuan. The move would help Hong Kong’s drive to be the Chinese currency’s leading offshore hub, and win political favour in Beijing. But the structure holds little appeal for serious investors.
China web user numbers are investment red herring 24 Jan 2014 Do more users mean more money for internet companies? Some investors think so. After a report showing a decline in microblog users, shares in Weibo owner Sina slid almost 7 pct. Yet what matters more is potential for turning a profit. Investors are hung up on the wrong metric.