Hong Kong shreds hopes for orderly disorder 29 Sep 2014 Thousands of protestors have taken to the streets, at times clashing violently with police. Markets remain open, and the financial sector hasn’t been targeted directly. But the loss of control over a carefully planned disobedience movement has damaging long-term implications.
Best defence against short-sellers is to buy stock 12 Sep 2014 Several Chinese companies are under attack from anonymous research firms. Executives have tried to dispel doubts about their financial statements while railing against unnamed critics. But the most effective riposte to those betting on a lower stock price is to buy more shares.
Sukuk are newest financial centre status symbol 12 Sep 2014 Hong Kong has followed the United Kingdom by issuing an Islamic sovereign bond. There’s little demand in either place for such instruments but the hope is they will lure other issuers. Much like the global race to trade the Chinese currency, innovation signals a city’s ambition.
Democracy snub leaves Hong Kong only bad choices 1 Sep 2014 Citizens in the former colony have two options: choose between Beijing-approved chief executive candidates, or don’t vote at all. The new ruling leaves little room for compromise and risks a showdown with protesters. China’s leaders seem to care ever less what the world thinks.
Alibaba deal spree turns from romance to thriller 15 Aug 2014 A Hong Kong-listed movie company has revealed accounting problems four months after the e-commerce giant bought a stake. It’s not clear whether Alibaba’s controls were flawed. But investors in its upcoming IPO may be less confident about the company’s investment binge.
Jardine’s fresh China model for foreign retailers 13 Aug 2014 The Asian conglomerate’s retail arm is buying nearly 20 pct of Chinese supermarket chain Yonghui for $925 mln. Minority stakes are usually best avoided. But retailers like Tesco have destroyed value trying to crack the Chinese market alone. A more cautious approach is justified.
Red tape could save Hong Kong democracy debate 16 Jul 2014 Many citizens want free elections; Beijing has other ideas. A long-awaited government consultation sits on the fence. But that might be for the best. What businesses want is stability and rule of law. An anti-climatic compromise would be something they can rally around.
WH Group’s revived IPO shows one lesson learnt 14 Jul 2014 The Chinese pork producer is planning a re-run of its failed IPO, having cut the size, valuation, and number of advisers. WH Group learned that being too greedy doesn’t pay. But without an exuberant price, it’s not clear why it is rushing back to market at all.
Hong Kong democracy debate puts business on spot 3 Jul 2014 Thousands of citizens are pushing for fairer elections. The Big Four auditors and others have responded by warning of the dangers of disruption. Their clumsy interventions miss the point. The right to protest is a key part of the system that makes Hong Kong a magnet for commerce.
Hong Kong’s IPO debate risks missing the point 19 Jun 2014 A government-backed body has weighed in with proposals to make the city more appealing to new listings. But it failed to take a stand on whether to relax the rule of “one share, one vote”. Following Alibaba’s defection to the U.S., regulators need to tackle the issue head on.
New World woe shows danger in Cayman safe haven 18 Jun 2014 The Hong Kong property group’s buyout of its China unit failed after shareholders with less than 1 pct of the votes blocked the deal under the island’s archaic rules. It’s a reminder that a Cayman domicile brings risks as well as rewards for Asia’s power-hungry tycoons.
China’s Hong Kong experiment faces biggest trial 13 Jun 2014 Economic tensions and coming “Occupy Central” democracy protests are testing a two-system formula that has thrived for 17 years since the former colony returned to the People’s Republic. Hong Kong’s stability and China’s patience can no longer be taken for granted.
Graft case may yet test Hong Kong’s top developer 16 May 2014 The Kwok brothers are on trial in one of the city’s biggest corruption cases. Sun Hung Kai Properties’ business has held up since the arrest of its co-chairmen in 2012, but the group’s shares have lost their premium rating. The verdict will determine the scandal’s true cost.
WH Group flop shows pitfalls of crowded IPOs 30 Apr 2014 The Chinese pork producer hired a record 29 banks but still failed to sell its $1.3 bln listing to investors. That undermines the received wisdom that more advisers mean less risk for issuers. For banks, it’s a reminder they can share embarrassment as well as league table credit.
WH Group’s pulled pork IPO is least bad outcome 29 Apr 2014 The Chinese producer was so greedy even 29 banks couldn’t sell its $1.3 bln Hong Kong offering. Pushing ahead would have left private equity backers with a big stock overhang. A delay gives WH Group time to integrate its big U.S. deal, although it means carrying debt for longer.
Dairy holds key to $1.2 bln Goodman takeover 28 Apr 2014 The troubled Australian food group has rejected a bid from Singapore’s Wilmar and Hong Kong’s First Pacific that values it at 8 times this year’s EBITDA. To convince investors it is worth more on its own, Goodman quickly needs to find a buyer or partner for its dairy business.
Asia push to in-house M&A forces advisers to adapt 17 Apr 2014 From China’s CITIC to Singapore’s Temasek, Asian acquirers are increasingly relying on in-house talent to get deals done. The loss of potential deal flow in an already tough market means big banks will have to work harder to prove their worth.
CITIC’s $37 bln merger hints at SOE reform task 16 Apr 2014 The union of the Chinese giant with its Hong Kong-listed subsidiary offers rare visibility into China’s sprawling state conglomerates. CITIC Pacific shareholders get mostly listed assets at a discount – and if all goes well, a potentially profitable ringside seat in the cleanup.
Hong Kong needs to defend shareholder democracy 16 Apr 2014 The stock exchange is poised to launch a debate on shareholder voting rights after Alibaba cancelled its listing in the former colony. Dumping “one share, one vote” won’t necessarily attract many new IPOs. But it would undermine Hong Kong’s already shaky corporate governance.
China’s big pork IPO could be fat or lean 10 Apr 2014 Pig processor WH Group is hoping to raise as much as $7.1 billion in Hong Kong. But the range is huge: the maximum share price is 41 percent above the minimum. It suggests the group’s private equity backers, its 29 banks, and public investors may struggle to agree on a valuation.