MSCI’s China plan is clever window dressing 28 Apr 2017 The index provider has slashed the number of mainland stocks to include in benchmarks tracked by $1.6 trln in assets. This should win support after prior failed attempts. But resulting flows into China will amount to a rounding error. It's a very tiny step in the right direction.
Tech exuberance drives Didi to a $50 bln valuation 27 Apr 2017 China's top ride-hailing app is raising up to $6 bln. With no competition at home, the extra firepower seems unnecessary. A big chunk of the cash will probably go into counterparts abroad. It’s a fresh sign the huge sums raised by SoftBank and others are inflating startup values.
StanChart’s springtime revival is premature 26 Apr 2017 A sharp drop in bad loan charges helped the emerging market bank double pre-tax profit in the first quarter. Revenue growth was less impressive, though. Shaky assets and intense competition mean the lender is still some way from hitting CEO Bill Winters' modest return target.
Half-hearted crackdown dents case for Chinese P2P 26 Apr 2017 Peer-to-peer lender China Rapid Finance is set for a $100 mln-plus New York IPO. This looks badly timed: new rules last year failed to rid the industry of cowboys, and rival Yirendai trades at a low valuation. With that backdrop, sector heavyweight Lufax is unlikely to list soon.
IPO delay lifts spotlight off China’s shadow banks 25 Apr 2017 The first listing of a mainland trust company in 20 years is up in the air after it missed a Hong Kong regulatory deadline. This is a pity. The listing would have helped outsiders decipher the high-yielding trust products at the core of China’s intricate shadow-banking industry.
Taiwan, not China, is its own worst enemy 24 Apr 2017 Complacence has left the island in an economic funk. China-sceptic President Tsai, elected on a tide of domestic discontent, has a $29 bln stimulus package to bolster growth, but bolder reforms are hobbled by politics. That may leave Taiwan even more dependent on its neighbour.
China’s Aramco pitch puts pressure on Tokyo’s bid 20 Apr 2017 A Chinese consortium is angling for a cornerstone role in Saudi Aramco's IPO, Reuters says. This bolsters the case for a Hong Kong listing. Riyadh will like the prospect of easy money with few strings attached. Japan, also competing for the deal, may need to step up.
Huishan board implosion begs for director reform 19 Apr 2017 Mass resignations have left a troubled Hong Kong-listed firm without a working board. Independent directors were first to eject as problems mounted. Investors need more competent and reliable sentinels. Stronger minority representation could do the trick.
Weetabix goes better with U.S. cereal than congee 18 Apr 2017 Bright Food is selling the UK breakfast staple for $1.8 bln. This trailblazing cross-border deal has gone soggy, with EBITDA flat over five years. Grape Nuts maker Post Holdings is a more natural owner than a state enterprise. For once, China's outbound M&A machine is in reverse.
Deal flop will force Anbang to fly low in the U.S. 18 Apr 2017 The $1.6 bln takeover of Fidelity & Guaranty Life is off, after the Chinese insurer apparently baulked at revealing ownership details. This, the latest in a string of failed deals from China, shows opacity can be as much of a deal-killer as inexperience or security risks.
Private sector tells awkward truth on China growth 18 Apr 2017 First-quarter growth beat expectations at 6.9 pct. But investment and consumption were unhealthily focused on property and infrastructure. Wariness among retailers and service providers illustrates the difficulties China still faces in rebalancing its economy.
Chinese news app gets a sci-fi valuation 18 Apr 2017 A recent fundraising values Toutiao at $11 bln. Mainland advertisers are flocking to mobile apps, and Toutiao has a huge user base. But news feeds are not new and the business model has disappointed in the West. Buzzwords such as AI and big data are like clickbait for investors.
Jack Ma gives rival a new way to win M&A fight 17 Apr 2017 Ant Financial's sweetened $1.2 bln bid for MoneyGram is 20 pct higher than rival Euronet's. Cost cuts alone can't justify a new counteroffer. Given Anbang's struggles to close its deal with Fidelity & Guaranty, Euronet is better off waiting to see if regulators clear the way.
Trump finds markets, too, are complicated beasts 13 Apr 2017 The U.S. president no longer wants to label Beijing a currency manipulator. He belatedly learned the yuan hasn’t been purposely devalued for a while. He's also warming to the dovish Janet Yellen and the Export-Import Bank. As with healthcare, he seems to be learning on the job.
China’s money squeeze is making market suspicious 13 Apr 2017 The central bank is lifting short-term rates and draining liquidity to target speculators. Anxious banks and institutional investors are doing less business with each other as a result. This could cause rate spikes to intensify - and trouble could spill over into the stock market.
China’s smaller banks flunk hard decisions 12 Apr 2017 Big banks' annual results suggested China's bad debt problem is easing. Alas, the picture at smaller institutions remains grim. Some, like China Everbright, rolled over lots of shaky loans. It would be easier in the long run if these lenders started recognising more losses now.
Wall Street served low-hanging China fruit basket 10 Apr 2017 Negotiators for presidents Trump and Xi have reportedly agreed to ease the U.S. financial sector's access to China. It's an easy concession as the benefits will mostly accrue to Beijing: greater inflows of foreign capital, plus help upgrading bond and equity markets.
China’s Netflix-to-Tesla still awes investors 7 Apr 2017 LeEco's $2 bln purchase of U.S. TV-maker Vizio is reportedly stalled. That would add to a list of setbacks. But shares in LeEco's flagship listed unit still command a big premium to giants like Tencent. It takes a lot to shake Chinese investors' love of concept stocks.
Review: China’s New Silk Road mined with distrust 7 Apr 2017 The People's Republic wants to use its ambitious "One Belt One Road" infrastructure project to build soft power. "China's Asian Dream" by Tom Miller points out the potholes. The country’s search for regional allies is sabotaged by its sense of superiority.
Yum China slowly cooking up value for investors 6 Apr 2017 Separating KFC owner Yum Brands from its Chinese unit has yet to bring super-sized returns for shareholders. At least same-store sales in the People’s Republic are improving, especially at Pizza Hut. Drawing up recipes for corporate value creation is easy. Delivery takes time.