China’s abused offshore yuan is scarred for life 8 Nov 2018 As the currency nears 7 to the dollar, its weakest since 2008, officials are attacking short-sellers exploiting gaps in overseas derivatives trade. Beijing is trying to run two exchange rate regimes. A muddled strategy is making an already difficult balance unsustainable.
China Renaissance buyback aggravates IPO botch 7 Nov 2018 Roughly a month after a pared-down listing, the $1.3 bln investment bank and boss Fan Bao are buying a chunk of stock on the market. Companies globally are splurging on shares, and the gambit has improved prices a little. Investors and clients, though, will need more substance.
The Exchange: Pascal Lamy 6 Nov 2018 Few people have dedicated their careers to expanding international trade and globalism like Lamy, the former head of the WTO and EU commissioner. But rising rhetoric and increased tariffs between the U.S. and China have him worried, as he tells Rob Cox and Liam Proud in Paris.
Xi enters Shanghai in high-stakes tech IPO race 6 Nov 2018 China's leader granted the city a new board to compete with Shenzhen and Nasdaq for startups. It also will test a looser U.S.-style registration system for new listings. The steps are overdue, but officials may rue the governance risks and trading volatility they’re apt to bring.
U.S.-China mistrust heightens armed-conflict risk 5 Nov 2018 A near-collision between American and Chinese naval vessels in the South China Sea is a dangerous sign. Both militaries are stepping up readiness. With trade tensions high and the usual back channels dysfunctional, a clash – or worse – is a concern investors should not dismiss.
Naspers’ Vision Fund-lite carries less baggage 5 Nov 2018 The South African internet giant’s $8 bln answer to SoftBank’s mega-fund is quietly taking shape. Besides shunning the limelight, the Cape Town-based firm also lacks Masayoshi Son’s Saudi connection. Some of its early punts haven’t done too badly either.
Xi’s $40 trln trade show talk deserves discounting 5 Nov 2018 China opened a massive expo Monday, telegraphing its appetite for foreign goods. President Xi spoke of $40 trln in imports over 15 years – a seemingly big figure that implies little growth. Given recent talk of “self-reliance”, neither the fair nor Xi’s speech will change minds.
Brazil’s Bolsonaro gives China electric shock 5 Nov 2018 Beijing-backed energy companies hope to invest tens of billions in Brazilian power, but the president-elect has warned of Chinese intentions. Firms like State Grid would bring needed money and expertise, but populist suspicion might overrule commercial logic.
Breakdown: China’s stimulus 2.0 is a trickier trade 5 Nov 2018 Beijing is trying to warm a cooling economy with easier money, lower taxes and some $200 bln of infrastructure bonds. A bad debt hangover from the last building spree dilutes the impact of spending, however. This time around, there may be less for investors to get excited about.
Alibaba feeds fears of cooling Chinese consumption 2 Nov 2018 Quarterly sales hit $12 billion, but the e-commerce titan missed expectations and trimmed guidance. That suggests local shoppers and advertisers may be pulling back. It won't reassure investors rattled by trade tensions and lacklustre spending during a big October holiday.
Chinese M&A lessons could go to waste 2 Nov 2018 Buyers, in general, underperformed the market from 2013 to 2017, a new report suggests. But the country’s most acquisitive companies, such as Tencent and Ping An, delivered better returns for shareholders. Showing off those new skills will be harder in the current environment.
China trade-secrets case brings sanctions closer 1 Nov 2018 State-backed chipmaker Fujian Jinhua was indicted for allegedly stealing designs from U.S. rival Micron. It was already barred from buying U.S. parts, so this raises the stakes. Former President Obama mulled sanctions for industrial espionage. That idea could be in play again.
China’s Mr Fix It banks have a property problem 1 Nov 2018 Beijing wants lenders to do everything. That means supporting infrastructure spending, propping up stocks and rescuing state zombies – all while cutting bad debt. It’s a tough juggling act. Now, though, there are worrying signs in property: if that ball drops, others may follow.
Evergrande’s bond bravado baffles bystanders 1 Nov 2018 The indebted Chinese developer issued $1.8 bln of dollar bonds at eye-watering coupons, but sold $1 bln to its chairman. With housing looking toppy, the yuan sliding, and a listing in the works, Evergrande has a lot of balls in the air. This gesture confuses more than it amuses.
China’s advertising giants face white space 31 Oct 2018 With a slowing economy, marketing teams will pull back on ad spend. That will hit sales growth for search titan Baidu and microblog Weibo. The squeeze, alongside Google's mooted return to China, threatens to exacerbate the tech selloff and puts fresh importance on the race to diversify.
Trade and pig diseases infect China’s pork giant 31 Oct 2018 WH Group, $11 bln owner of U.S.-based Smithfield, is fighting a losing battle on two fronts. Deadly swine fever is sweeping China, while tariffs hammer its American market. Quarterly earnings fell by almost a third from a year earlier. It will get worse before it gets better.
China’s oil windfall covers up hints of gas pain 31 Oct 2018 PetroChina has reported a more than fourfold rise in quarterly earnings, a bumper profit fuelled by higher crude prices. But the $210 bln state producer also took a heavy hit on gas imports this year. Those losses may widen as China cranks up a shift away from coal at all costs.
Ping An’s tech wizardry hits old-school hurdles 30 Oct 2018 The $165 bln Chinese insurer posted a 7 pct drop in earnings, weighed down by its property and casualty arm. Nifty tech like AI has helped it offer more targeted policies. Yet outdated rules have meant a higher tax bill. The group can afford to work its magic on regulators.
Wilbur Ross finally picks right fight with China 30 Oct 2018 Washington has put a provincial chipmaker under an embargo similar to that which crippled telecoms giant ZTE. Fujian Jinhua is accused of IP theft by Idaho-based Micron; this retaliation presumes guilt. Still, targeting smaller state-backed firms is smarter than blanket tariffs.
China tax cut would only be band-aid for carmakers 29 Oct 2018 Halving the levy on new vehicle sales might help prop up falling demand. But it could delay the country’s much-needed industry consolidation. Meanwhile foreign automakers have far more to fear from U.S. and European slowdowns – not to mention the prospect of more trade tariffs.