China eases HNA’s glide path 19 Jun 2018 The troubled conglomerate has billions in debt coming due soon. Official pressure on banks to support HNA bonds could therefore help it refinance, minimising the risk of an unplanned financial accident. That also buys time for more selloffs to further sharpen its focus on travel.
Trump’s trade animus undermines valid China beef 15 Jun 2018 The White House on Friday imposed tariffs on Chinese goods in response to intellectual-property theft. It’s a legitimate issue that also plagued Obama. But Trump’s other anti-trade moves hurt his case – and U.S. importers. He also isn’t tackling China’s long-term economic threat.
Chinese P2P giant Lufax dodges valuation bullet 15 Jun 2018 A mooted private fundraising of more than $1 bln makes sense. With regulatory change coming to peer-to-peer lenders, floating now could upset Beijing, and might only be doable at a bargain price. Abundant venture capital offers a way to keep growing without a distracting IPO.
The Exchange: Italy’s almost premier 15 Jun 2018 Carlo Cottarelli talks about how he nearly led a caretaker government after President Sergio Mattarella last month rejected a euroskeptic finance minister put forward by the parties that won March elections. The former IMF economist has some advice for Italy’s new bosses.
Xiaomi IPO escalates China’s battle of the bourses 15 Jun 2018 The handset-maker will now sell at least half of its mooted $10 bln offering in Shanghai. That is a blow to the other listing venue, Hong Kong, which changed its rules to woo more tech IPOs. The city will have to share a lot of this business with its two mainland rivals.
Chinese tutor’s short answer will be instructive 15 Jun 2018 Muddy Waters invoked Enron in its fraud accusations against $24 bln Tal Education. Complicated attacks can be hard for outsiders to parse, but corporate responses to bearish investors are often telling. China Internet Financial Services and AMD provide useful case studies.
Judges supplement U.S. defences on China trade 15 Jun 2018 The Supreme Court said courts shouldn’t take foreign governments’ claims about their own laws at face value. The underlying case, over vitamin price-fixing, rumbles on. This decision attacks an inconsistency Beijing has exploited in arguing firms are just following orders.
Gary Cohn only delayed inevitable trade war 14 Jun 2018 The Goldman Sachs banker who went to the White House says U.S. trade spats could wipe out the benefits of tax cuts he championed. President Trump may yet escalate his campaign against China. Cohn was a helpful buffer, but Trump’s anti-globalist instincts are now in full control.
China’s DRAM dreams may trigger glut memories 14 Jun 2018 Consolidation, rising costs, and technological limits have turned memory-chip production from a cash-burning exercise into a profitable triopoly. Chinese firms’ efforts to break in – along with Beijing’s pricing investigation – risk eroding the industry’s good times.
China starts trading debt for growth 14 Jun 2018 Shadow bank lending slowed sharply in May, and investment growth slipped to just 6.1 pct. For now, Beijing’s target of increasing GDP by 6.5 pct annually is safe. But officials will be thinking about creative ways to keep credit flowing, even as they discourage riskier behaviour.
Hadas: This should be an anti-dollar moment 13 Jun 2018 Discontent with the world’s dominant currency is not new, but the Trump effect is something new. A trade circuit free from the U.S. president’s idiosyncratic America-first policies is urgently needed. The euro and renminbi can provide a base, but the politics are unpromising.
New ZTE regime could climb out of big hole 13 Jun 2018 The Chinese telecoms company lost some $3 bln of market value after its reprieve from a U.S. death sentence. That suggests concerns about the clean management sweep. If, however, ZTE can find decent leadership and stay out of trouble – big ifs – a 5G rollout holds real promise.
China will tightly control even looser capital 13 Jun 2018 Money is moving more freely in and out of the country as fears that sparked a 2015 clampdown wane. Greater sums can be invested abroad while daily limits from Hong Kong to mainland markets quadrupled to $8 bln. Official signals suggest, however, that the easing will be tortuous.
Ralph Lauren’s growth track runs through China 12 Jun 2018 The clothier aims to boost revenue by $1 bln by 2023. The 16 percent target seems bold given the label’s recent woes and upheaval in the retail sector. But the quintessential American brand’s provincialism may be its saving grace. It has room to expand in the People’s Republic.
Trump and Kim’s TV diplomacy lacks definition 12 Jun 2018 A meeting between U.S. President Donald Trump and North Korea’s leader was mostly for the cameras. "Denuclearization" remains a distant prospect. Still, engagement reduces the risk of ruinous conflict and might even pry open Pyongyang’s closed economy, benefiting neighbours.
Valuing Xiaomi 12 Jun 2018 The Chinese smartphone maker is heading toward one of the biggest IPOs in years. A $75 bln valuation is being reported as a possibility. Run the growth, profitability and earnings multiple numbers to see how such a lofty figure might be achieved.
Only a bold call dials up $75 bln Xiaomi valuation 12 Jun 2018 The Chinese company would have to deliver another year of soaring handset sales and double revenue from internet services. Superior profit margins and premium multiples also must be assumed, a Breakingviews calculator shows. Anything less and the IPO will have the wrong number.
Trump trade spleen makes foreign firms great again 11 Jun 2018 A fragile G7 detente imploded over his steel tariffs and an adviser's dig that there’s a “special place in hell” for Canada’s Trudeau. Because retaliation pushes up costs, the levies hurt U.S. firms more than they help. It’s rivals like Chinese ag firm COFCO that will profit.
CFIUS proves it is not a one-way bet after all 11 Jun 2018 The U.S. security panel cleared China Oceanwide’s $2.7 bln takeover of Genworth, after nearly two years of waiting and as Washington and Beijing feud over trade. The insurer’s shares carried a 30 pct discount, showing just how hard it is to price regulatory risk right now.
China’s giant battery-maker can outrun IPO hype 11 Jun 2018 CATL shares rose by the maximum 44 pct in its market debut. While such ardour is common in China’s frothy markets, the $12 bln local champion could live up to high expectations. Its success will also rev up demand for the next listings that ride the global electric vehicle boom.