Weibo walks blurry line between censors, investors 23 Jun 2017 Beijing has cracked down on politically-sensitive videos on the microblog, wiping $1 bln off its market value in a day. Other Chinese internet outfits are exposed to similar risks. But Weibo's business model will keep putting it at odds with the country’s unpredictable censors.
China web giants stuck with telco reform bill 22 Jun 2017 Alibaba and Tencent will join a group investing $10 bln in struggling China Unicom, Reuters reported. It’s part of Beijing's plan to increase private investment in state-owned firms. Unicom is the clear beneficiary of the boost. How the internet giants will profit is unclear.
China underscores new hard line on outbound M&A 22 Jun 2017 The banking regulator is probing loans made to serial acquirers Anbang, Fosun, HNA and Wanda, reports say. Following the detention of Anbang's chairman, the message is clear: bold foreign M&A is out of bounds. The puzzle is why the authorities let the splurge last for so long.
Glencore misreads Chinese tea leaves in bid battle 21 Jun 2017 Rio Tinto still wants to sell $2.5 bln of coal assets to China's Yancoal, rather than taking $100 mln more from the Swiss trader. Worries that Beijing would create problems for the gatecrasher probably played a role. A sharply higher offer could persuade Rio to reconsider.
MSCI gives investors a shot of China’s old economy 21 Jun 2017 The U.S. index provider took the historic step of adding some mainland-listed shares to its global benchmarks. The new entrants include a raft of banks, manufacturers, and raw-materials firms. This will expose foreign investors to sectors challenged by high debt and low growth.
China index inclusion more form than substance 20 Jun 2017 After deciding against it for three years, MSCI will finally add 222 mainland-listed shares to its global benchmarks. This will be a relief for Beijing, which got egg on its face at prior reviews. But the move is largely symbolic and will generate only modest inflows to China.
Ford’s new driver veers back onto old road 20 Jun 2017 Jim Hackett is shifting production of the Focus compact to China from Mexico. The move risks angering President Trump but it’s a smart use of capital and a sign globalization isn’t dead. It’s also ex-CEO Mark Fields’ idea, proof there’s no quick fix for what ails the automaker.
Li Ka-shing’s successor faces big disruptions 20 Jun 2017 The retirement of the 88 yr old would signal the end of an era for Hong Kong's tycoons. His eldest son is waiting in the wings to inherit the empire topped by CK Hutchison. He faces daunting challenges from the inevitable departure of his father’s trusted lieutenants to Brexit.
Public housing pressure builds for next HK leader 20 Jun 2017 The city's real estate bubble, buoyed by low rates, limited supply and mainland money, is stoking social unrest. House prices are out of reach for most; rents are punitive. Like prior leaders, Carrie Lam promises more affordable housing. It's better policy that's in short supply.
Pressure on Anbang could ripple outwards 20 Jun 2017 Following its chairman’s detention, the Chinese insurer’s access to funding is in doubt. If it can no longer sell so many policies, or if investors want out early, asset sales could follow. Beijing will want to avoid turmoil. But Anbang’s size and sprawl create added uncertainty.
LeEco showcases tech hubris in widescreen format 19 Jun 2017 Jia Yueting’s outfit aimed to be Apple, Netflix, and Tesla in one. Now it is slashing jobs, pulling back abroad, and fielding lawsuits. LeEco was exceptionally ambitious. But when overconfident founders have a free rein and easy money, the results rarely make comfortable viewing.
Asia’s buyouts are priced for unlikely perfection 19 Jun 2017 The region is awash with private-equity money. Yet good targets are relatively scarce and command stratospheric valuations. Chinese deals, on one estimate, average 18 times EBITDA. For that to pay off, buyers need both growth and market multiples to remain buoyant for years.
Chinese firms are running short on funding options 15 Jun 2017 A regulatory crackdown on the rapid surge of shadow banking is bearing fruit, central bank data shows. Yet corporate bond issuance has also plummeted, and regulators are slowing IPO approvals. The economy risks overdependence on bank lending once again.
Chinese outbound M&A approaches a new normal 15 Jun 2017 Pressure abroad and at home is curbing deals, and life is getting tough for acquisitive giants like Anbang. A politically sensitive period could intensify the slowdown. Further out, though, today’s run rate of about $130 bln a year looks reasonable by international standards.
Investors may be new killer species at SeaWorld 14 Jun 2017 They voted against the re-election of the $1.5 bln theme-park group’s chairman in an apparent rebellion over pay. It’s a stunning rebuke in the absence of a proxy fight and with a newly minted Chinese 21 pct stakeholder. Activism doesn’t always require an activist.
Doublethink threatens Chinese green leadership 14 Jun 2017 Donald Trump has gifted China the chance to lead the charge against climate change. But the country must conquer a contradiction. Beijing bureaucrats may love cleantech investment, but as economic growth slows, they fear the costs of regulation and restructuring.
Anbang drama is coda to China’s M&A craze 14 Jun 2017 Reports say Chairman Wu Xiaohui has been detained. Various factors could be at play: China is getting tough on swashbuckling insurers, and a political power shuffle looms. This may also be a further sign that Beijing has run out of patience with splashy foreign dealmaking.
Biotech IPO rejuvenates Hong Kong market 13 Jun 2017 Shares of WuXi Biologics, the city's biggest listing this year, popped as much as 39 pct on their debut. High earnings growth and a lack of exciting IPOs led to strong demand for the $511 mln deal. This is good news for a bourse keen to attract a new breed of entrepreneurs.
Glencore looks well-placed to snatch Rio coal unit 12 Jun 2017 The trading giant has shoved aside Yancoal's slow-moving purchase of Rio Tinto assets with a $2.6 bln cash bid - $100 mln over Yancoal's still not-quite-financed offer. Glencore is betting Yancoal has thin political support and weak financial firepower. That seems shrewd.
MSCI’s China index inclusion risks liquid headache 12 Jun 2017 The index provider will decide this month whether to add yuan-denominated shares to key benchmarks. Scandals and trading halts at Hong Kong-listed mainland firms have made passive fund managers' jobs difficult already. Bringing in onshore tickers could complicate things further.