Viewsroom: America sees red on China trade deal 24 May 2018 Getting Beijing to force companies to buy more U.S. soybeans and oil may help the Trump administration claim a numbers victory. But it reinforces China’s statist instincts while ignoring most U.S. business beefs with Sino-American trade. Plus: has Tencent hit a peak?
Samsonite short case piles up Hong Kong’s baggage 24 May 2018 An experienced stock sceptic has laid into the $6 bln luggage-maker’s governance and accounting. It’s a bigger and better-known company than the Chinese minnows typically targeted. For a market relaxing standards to broaden its appeal, Samsonite gives investors more to unpack.
Canada adds to global muddle with Chinese M&A veto 24 May 2018 Ottawa blocked the $1.2 bln sale of construction company Aecon to a Beijing-backed rival on national security grounds. The controversial decision could confound trade talks between the two countries. Increasingly, mergers are getting mixed up in the wider geopolitical realm.
U.S. threatens autos with scorched-earth gambit 24 May 2018 Raising the prospect of tariffs on all vehicle and parts imports may just be President Trump's fuel-injected bargaining ploy for NAFTA negotiations. If the levies actually happen, it could bring a few more jobs stateside. But it'd leave domestic and foreign automakers reeling.
U.S.-China trade gap is best filled with software 23 May 2018 Beijing plans to shrink the $375 bln surplus by buying commodities like oil and soybeans. Better to import intellectual property, and pay for the millions of unlicensed copies of Microsoft and Adobe products running in China. Local firms could use the productivity upgrade.
Oil index deal reinvents an old buyout trick 23 May 2018 Chinese-backed ZZ Capital International has struggled to close a roughly $800 mln purchase of U.S. data provider Alerian. Now two of its top dealmakers are leaving, and resurrecting the takeover at their new shop. That puts a fresh spin on pass-the-parcel deals by private equity.
Trump indulges China’s statist instincts on trade 22 May 2018 To spare Chinese telecoms giant ZTE from extinction, its execs will be scapegoated for violating sanctions, averting an export ban. Beijing will also order firms to import more U.S. goods. Washington is effectively encouraging command, rather than market, economics in China.
Baidu gets $9 bln warning to stay the course 21 May 2018 The surprise exit of COO Lu Qi sparked a big drop in the Chinese search engine's shares. He helped Baidu focus on search and AI, lifting the company's market value since his arrival from Microsoft in 2017. Boss Robin Li has been sent a strong message about what investors want.
U.S.-China trade deal kicks nearly every can 21 May 2018 Beijing agreed vaguely to reduce imbalances and improve IP rights, both of which it has signaled before. A U.S. demand that China shrink its surplus by $200 bln went missing. Such details may yet get hammered out, but Xi Jinping's industrial policy looks safe amid the detente.
Ant Financial quacks like a bank 21 May 2018 The Alibaba-linked outfit is pitching itself as more tech than fin to secure a $150 bln valuation. With over 600 mln users relying on it for payments, wealth management and loans, though, Ant is part of the fabric of Chinese finance. Beijing would be wise to regulate accordingly.
Citi’s Hong Kong slap has lesson for new IPO boom 18 May 2018 The securities watchdog fined the U.S. lender $7 mln over a troubled 2009 flotation. One failing was a lack of oversight from senior staff. As a wave of biotech outfits, many boasting complex and unproven products, prepares to list, banks in the city will have to stay vigilant.
China’s Portuguese power bid may yet lure rivals 17 May 2018 It’s no surprise that EDP rejected a lowball 12 billion euro approach from China Three Gorges. The Chinese state’s effective 28 pct stake in the utility suggests a counterbid has little chance of success. But some European utilities may yet have grounds to get involved.
China’s airlines are set for a long-haul price war 17 May 2018 Beijing is freeing local carriers to raise fees at home and fight for share on international routes. State ownership endures, however, as do distorting airspace restrictions. A painful battle over fares is in the offing, and will come at foreign rivals' expense.
Local bureaucrats struggle to come clean in China 17 May 2018 Beijing is suppressing off-balance-sheet borrowing by regional governments, while new rules ease bond issuance. Yet the gap between their legal fundraising and fiscal obligations persists, hobbling efforts to cut a $2.6 trln debt pile. Mixed messages from the centre are to blame.
Viral game can unlock Tencent’s treasure chest 16 May 2018 The online giant has shed $95 bln of market value this year amid worries about falling margins. A 48 pct jump in first-quarter revenue helps ease those concerns. The Chinese launch of Fortnite, the game that has gripped teens across the world, also plays to Tencent’s strengths.
Chinese antivirus giant’s cash-call is well-timed 16 May 2018 360 Security Technology is making the most of its new home after fleeing New York. It’s capitalizing on an exuberant new Shanghai valuation to raise $1.7 bln through a private placement so it can chase AI and big data. This is another smart trade from founder Zhou Hongyi.
China’s Chile deal highlights a battery dilemma 16 May 2018 Tianqi Lithium is set to buy a stake in the $14.9 bln SQM. That suggests worries about excessive Beijing control over the key battery ingredient’s supply have eased. Still, the People's Republic would raise its share of output, hampering resource-rich nations’ scope to push back.
Tom Wolfe outlived his Masters of the Universe 16 May 2018 The "Bonfire of the Vanities" author, dead at 88, famously branded bankers as symbols of wealth and power. Wall Street's Sherman McCoys were chastened by the financial crisis, while new titans rose up in Silicon Valley. Wolfe set a high bar for capturing the corporate zeitgeist.
A Hollywood star may be born in Hong Kong 16 May 2018 STX, behind movies such as Jackie Chan's "The Foreigner", is ready for a stock-market premiere. Backers Tencent and John Malone co-star but the IPO features China, where the young studio has an edge. A somewhat original script also should support a valuation of at least $2.5 bln.
Santos suitor clears one of three major hurdles 15 May 2018 China's ENN and Hony Capital, top owners of the $10 bln Australian oil and gas producer, have aligned themselves with bidder Harbour Energy. That's vital support for the private-equity-backed group. A rising oil price is a remaining complication, and government approval another.