The Exchange: The Asianisation of the world 17 Sep 2019 A splintering West and increasingly interconnected East is creating a newly powerful mega-region, according to Parag Khanna, author of “The Future is Asian.” He swung by the Breakingviews office in Hong Kong to break down the economic and geopolitical rationales behind his idea.
Hong Kong’s revived IPOs play to tougher crowd 16 Sep 2019 AB InBev and ESR are restarting float plans cancelled during violent protests. Both may have better sales pitches, but ongoing unrest in the city and economic headwinds could still dampen demand. That they are pushing ahead anyway suggests they fear next year will be worse.
Washington casts longer shadow over Hong Kong 16 Sep 2019 Protests in the Chinese territory have rallied momentum for a proposal that scrutinises its special trade status and threatens sanctions. It’ll be hard to make the bill a priority in Congress, but President Trump could use it as leverage as he seeks a broader deal with Beijing.
Hong Kong’s LSE bid suffers market credibility gap 12 Sep 2019 Shares in Hong Kong Exchanges and Clearing barely budged in response to a bold $37 bln cash-and-share offer for its London rival. That could be a sign that investors like the combination. A better explanation is that they think it’s unlikely to happen.
HKEX bids $37 bln to halt London rival’s escape 11 Sep 2019 Hong Kong’s exchange is dangling a 23% premium to LSE shareholders if they reject a $27 bln deal with data provider Refinitiv. It’s a last-ditch attempt to snag the perennial takeover target. But the tie-up has only vague financial benefits and faces a tricky political reception.
Carrie Lam climbdown hints at Beijing’s priorities 5 Sep 2019 Hong Kong’s chief executive withdrew a controversial extradition bill, probably with central government approval. Her other comments implied that mainland officials are focused on risks to China’s positive international image. Trade negotiators should take note.
Hong Kong leader’s overdue concession is a start 4 Sep 2019 Carrie Lam has formally withdrawn an extradition bill which triggered months of often violent anti-government demonstrations. The local market, and battered brands like Cathay Pacific, have rallied. It will take more to appease protesters and keep that recovery going.
Data-centre IPO is safer proxy for tech bubble 4 Sep 2019 UK-based Global Switch aims to raise $1 bln in Hong Kong. Rising internet usage requires more server warehouses. Returns have been better for this type of real estate than other humdrum property, too. It’s a neat way to play the cloud and 5G era for buyers with a weaker stomach.
Capitalist amnesia enables China’s tough line 2 Sep 2019 Violence in Hong Kong has worsened. A Reuters report, meanwhile, says Beijing rejected compromise with protesters. Investors have ignored ugly crackdowns before, including in Xinjiang; such indifference feeds cynical expectations that harsh measures may be forgiven again.
Air China edges closer to Cathay Pacific’s cockpit 27 Aug 2019 Unrest in Hong Kong may prompt the local $5 bln airline to change course. Bookings have fallen, and Beijing’s ire over protesting employees forced out its CEO. The mounting pressure makes it a bit easier to see owner Swire selling out to its rival and big mainland shareholder.
Chinese AI listing concentrates risk factors 26 Aug 2019 Artificial intelligence startup Megvii has filed for a Hong Kong IPO even as protests rock the city. Controversial facial recognition technology and scrutiny from Washington may alarm investors, as could plans for super voting stock. To fundraise now looks brash, or rushed.
Hong Kong leader boxes herself into a corner 26 Aug 2019 Carrie Lam keeps failing to defuse a crisis of her own making. Increasingly out of touch, she has become a liability as the economy suffers and China’s anniversary approaches. It’s getting harder to see how she will be the one to find a compromise that subdues violent protests.
Viewsroom: How to read the recession runes 22 Aug 2019 A U.S. downturn is near, judging by past early warning signals from yield curves to bank valuations. But fallout from the 2008 crisis has sapped them of some predictive power. Plus: what the exit of Cathay Pacific’s CEO says about Beijing’s response to the Hong Kong protests.
It is too soon to call a bottom on Baidu 20 Aug 2019 Despite a 62% decline in quarterly profit, the $36 bln Chinese internet company gave investors something to cheer with unexpected growth in video. Its main search business is hurting, though, and the ad outlook is weak. ByteDance and Meituan Dianping are coming for Baidu, too.
Li Ka-shing raises fresh glass to diversification 19 Aug 2019 Hong Kong’s richest man is buying the Greene King pub chain for $5.6 bln including debt. Most of his empire’s sales are abroad already. But given the deal injects new capital into the UK, it’s still a boon for Brexit Britain and a minor thumbs-down for his troubled home turf.
Cathay shakeup clarifies China’s corporate muscle 16 Aug 2019 Boss Rupert Hogg and a top deputy resigned abruptly after the $5 bln airline scrambled to quell a mainland backlash related to Hong Kong protests. State carrier Air China owns a smaller stake than Swire, but Beijing’s sway looks bigger. The timing couldn’t be worse for Cathay.
Unrest is recurring cost of Hong Kong’s stinginess 16 Aug 2019 Since demonstrations rocked the city in 2014, economic roots of dissatisfaction have worsened. Housing prices rose, tycoons’ dominance increased, and officials made token gestures while hoarding fiscal reserves. Today’s protests are political, but inequality feeds the flames.
Nio flashes warning for China’s luxury car market 16 Aug 2019 A co-founder of the $3 bln Tesla wannabe has quit, the latest in a string of departures. It comes after battery fires and other strategic missteps at the electric-vehicle maker. But its woes may also portend slowing premium demand: that should worry peers.
Hong Kong businesses pick an ill-timed ESG fight 13 Aug 2019 A stock exchange plan to increase disclosure on green issues and governance has met resistance from local firms, wary of extra costs. The city already lags the likes of Singapore on such reporting; protests are hardly adding to its appeal. A corporate victory would be pyrrhic.
HSBC can use some lobbying flair in China 12 Aug 2019 The bank’s Greater China head has left, days after the abrupt exit of group CEO John Flint. Shake-ups happen. This one, though, comes as the lender faces heat in Beijing over its cooperation in U.S. probes into Huawei. New bosses will need diplomatic nous for a tricky task ahead.