Carrefour’s ills demand Tesco-like revamp and more 31 Aug 2017 The French supermarket said full-year operating profit could fall 12 percent, partly due to stiff competition at home. The grocer’s new CEO faces even more challenges than Tesco’s Dave Lewis did three years ago. Domestic market share is shrinking and its online offering is weak.
China’s big banks dig deeper into housing market 31 Aug 2017 ICBC, Bank of China, CCB and AgBank are extending new credit, though not as quickly as the wider financial system. Their restraint is welcome, as are signs of improving bad loans. But continuing to lend heavily into the country’s property boom could be storing up fresh trouble.
Water woes may leave green-car hopes high and dry 28 Aug 2017 Ford is the latest to ramp up electric-vehicle production with a deal in China. But the industry relies heavily on the Democratic Republic of Congo for a crucial battery material. Drought, abysmal infrastructure and conflict could put ever-increasing supply needs at risk.
Viewsroom: Fiat Chrysler’s painful choices 24 Aug 2017 Great Wall Motor wants to buy Jeep. That’d leave the Italian-American carmaker cash rich but devoid of profit in a fast-changing industry. Meanwhile, Uber tries to find a silver lining to the cloud its drivers are under. Plus: what makes China’s unicorns a different breed.
Tencent’s team has upper hand in Chinese food fight 23 Aug 2017 China’s three web giants are supporting rival food-delivery firms, in a big bet on “online-to-offline” services. The leader, Tencent-backed Meituan-Dianping, is cashed-up and looks unassailable. Even a mooted merger of its rivals could distract them and help bring subsidies down.
Jeep sale would leave Marchionne nowhere to hide 22 Aug 2017 The Fiat Chrysler CEO advocates using M&A to stop carmakers wasting precious capital. Selling the company's top brand to China's Great Wall - a long shot politically - might raise $23 bln. But it would leave an emaciated rump and set up Marchionne’s last lap to be a dismal one.
Fiat Chrysler would rev up China’s Great Wall 21 Aug 2017 The $19 bln Italian group has bid interest from the Chinese carmaker. Just as Geely’s takeover of Volvo helped it revamp designs, Great Wall could benefit from Fiat’s knowhow, especially at Jeep. But this could seriously stretch the buyer’s finances and management capacity.
China’s M&A controls trap firms in a warped market 21 Aug 2017 Officials have formalized guidelines curbing "irrational" purchases of foreign hotels, soccer clubs, film studios and so on. However, M&A is a small factor in China’s debt problem. Nor does this fix the margin-destroying distortions that encourage companies to venture overseas.
Jack Ma’s MassMutual deal shows promise 18 Aug 2017 The Alibaba founder’s unit Yunfeng Financial is buying MassMutual’s Hong Kong arm. The $1.7 bln deal with the U.S. insurer helps turn Yunfeng into a broader financial group, by adding insurance and pensions operations. Once again, Ma is melding online and offline businesses.
Rot spreads to Lenovo’s core 18 Aug 2017 Flat sales and rising costs in the Chinese group’s main PC unit pushed it to an unexpected quarterly loss. The $7 bln group is already struggling to turn around smartphone and server arms, while pushing into AI. Lenovo’s top priority now has to be fixing its core business.
Advertisers rise to VIP status for Alibaba 17 Aug 2017 The Chinese e-commerce group raked in over $7 bln of sales in the recent quarter, thanks to a surge in ad dollars. Marketing revenue already accounts for half of the total, and Alibaba is pushing hard to attract more top brands. These early efforts look promising.
China’s telco overhaul is oddly engineered 17 Aug 2017 State-backed China Unicom will get $11.7 bln, including from Tencent and other tech stars. Less encouragingly, this flagship “mixed-ownership reform” also includes public money. And the funds are going through another unit in Shanghai, effectively limiting influence by outsiders.
China takes misplaced pride in stock meddling 17 Aug 2017 China's securities regulator credits a crackdown on financial risk for rallying indexes, cutting volatility and rationalising prices. Thus, curbs on derivatives in place since 2015 have been lifted. Officials have learned worryingly little about moral hazard since the last crash.
Cathay’s ugly first half points to further woes 17 Aug 2017 Cathay Pacific has posted its worst half-year loss in at least two decades. Despite attempts to cut costs, the Hong Kong carrier is still locked into costly fuel hedging contracts and faces tough competition. Investors shouldn’t expect a return to profitability any time soon.
Tencent is biggest target in China cyber crackdown 16 Aug 2017 As Beijing's campaign to control content gathers pace, gaming giant Tencent, which delivered another set of strong quarterly results, is an easy target for censors. Its soaring market value, however, suggests investors have yet to factor in the risk to earnings.
Geely drives bumpy road toward global fame 16 Aug 2017 The firm that bought Volvo could become China’s first truly international carmaker. That hope, plus surging domestic sales, has sent shares in Geely's listed arm up over 230 pct in a year. But the lure of overseas glory could distract. This company needs to keep winning at home.
Chinese tech titans suffer credibility GAAP 16 Aug 2017 Online retailer JD generated quarterly profit of $144 mln. Apply conventional accounting practices, however, and it lost $42 mln. Alibaba also emphasizes figures that flatter by excluding stock-based pay. It widens a chasm with U.S. peers like Amazon that have kicked the habit.
Marchionne’s Maserati spinoff lacks traction 15 Aug 2017 Fiat Chrysler’s boss is considering selling the group’s premium brands, according to a report. He staged a similar trick with the firm’s high-end Ferrari brand. Yet Maserati and Alfa Romeo are tiny and need Fiat’s production lines. Staying part of a larger group makes more sense.
China’s biggest unicorns are a different breed 15 Aug 2017 The country’s biggest startups include purveyors of fintech, handsets, and apps offering rides, food and news. Compared to U.S. unicorns, there is even more focus on serving smartphone-wielding individuals – which is both understandable and risky.
Xi throws a bad Party for Hong Kong investors 15 Aug 2017 The Communist Party is tightening its grip on Chinese state-owned enterprises listed in Hong Kong. Beijing has usually set the agenda at SOEs anyway. But injecting yet more of President Xi's muddled market strategy into decision-making could cost investors.