Dual-currency IPO benefits everyone but investors 27 Jan 2014 Chinese pork producer WH Group may offer new shares in both Hong Kong dollars and yuan. The move would help Hong Kong’s drive to be the Chinese currency’s leading offshore hub, and win political favour in Beijing. But the structure holds little appeal for serious investors.
Hong Kong investors see double with nightclub IPO 24 Jan 2014 Mom and pop shareholders are fist-pumping to the city’s hottest offering: shares of Magnum Entertainment doubled on their debut. Novelty, not financials, is fuelling demand. Hong Kong’s most over-subscribed listing looks just like its clubs: overhyped with long lines at the door.
Hong Kong can’t build away high house prices 16 Jan 2014 The government is freeing up land and loosening planning laws to boost supply and make housing more affordable. But new construction will struggle to keep up with demand. Until interest rates rise or capital flows from China ease, Hong Kong property prices will remain stretched.
Hong Kong power IPO less generous than it looks 13 Jan 2014 Li Ka-shing’s utility spinoff is luring shareholders with a dividend yield of more than 6 percent. Though the business itself is stable, its debts make earnings vulnerable to higher borrowing costs. Rising rates will also give investors a bigger choice of income-earning assets.
Richard Li’s $2.4bln CSL deal reconnects with past 20 Dec 2013 The Hong Kong mogul’s telecoms group HKT is paying 6.1 times adjusted EBITDA to buy back the mobile company he sold to Telstra in 2001. The synergies needed to justify a premium of roughly 31 percent aren’t too taxing. HKT ends up more indebted, but it’s basically a happy reunion.
Li Ka-shing IPOs could be HSBC’s breakout moment 19 Dec 2013 The Hong Kong tycoon has handed the bank juicy mandates to help list two of his companies. That’s significant. HSBC has never quite managed to turn its formidable Asian corporate banking relationships into deal fees, to rivals’ relief. Things might finally be coming together.
HK inside-trade payout more deterrent than portent 13 Dec 2013 A former Morgan Stanley banker must repay Hong Kong investors $3 million in illegal trading gains. The ruling is another warning for would-be insider traders. But few cases are quite so clear-cut. Investors hoping for a rush of future compensation payments will be disappointed.
How Cinda squares China’s debt triangles 27 Nov 2013 The “bad bank” has spotted a clever arbitrage: borrow cheaply from other banks and buy companies’ short-term loans to each other. That addresses one of China’s most worrying trends, and reduces the risk of contagion if debts go bad. But it will only work in China’s closed system.
China bad bank emerges as not-so-bad IPO 25 Nov 2013 Cinda was created to bail out banks; now it mostly bails out companies. A boom in corporate indebtedness helped it expand earnings by 35 percent in the first half. If the economy worsens, there’s more to buy – but the prospects for its $21 billion portfolio would worsen too.
Hong Kong tycoons diverge in power plays 19 Nov 2013 The Kadoorie family’s CLP Holdings is buying local electricity assets from Exxon Mobil for $1.8 billion. That’s a contrast with rival Li Ka-shing who is reducing his exposure. CLP’s struggle to build an international business gives it an incentive to double down in the territory.
Shuanghui hits on recipe for meaty returns 15 Nov 2013 Take lukewarm U.S. pork producer Smithfield. Slather with debt, remove from the market then serve up almost immediately in a Hong Kong IPO. To ensure the new listing comes out golden, add the secret ingredient: investor exuberance over Chinese consumer stocks.
White male banker jabs at finance’s glass ceiling 8 Nov 2013 HSBC chief Stuart Gulliver says the bank must rethink its culture to attract and retain more senior women. Though the insight is hardly new, it’s still unusual for male CEOs to publicly admit the problem. The next challenge is for HSBC to show it can live up to Gulliver’s ideal.
HSBC stuck on a treadmill but getting fitter 4 Nov 2013 Despite flat income, underlying pretax profit rose 10 pct in the third quarter. Lower costs, fewer bad debts and a lack of big fines helped. HSBC’s long-term fortunes depend on GDP growth and interest rates. In the meantime, shareholders can at least expect steady dividends.
HK anti-foreigner property tax hits wrong target 25 Oct 2013 It’s a year since Hong Kong whacked a 15 percent levy on non-resident buyers. Luxury apartment values are subdued and speculators have moved on. But smaller flats are still getting more expensive. Only higher interest rates and increased supply will reverse the trend.
China bank IPO shows rewards of financial alchemy 24 Oct 2013 Bank of Chongqing’s remarkable 32 percent return on equity relies on a trick that is all the rage for the country’s lenders: repackaging loans to look like low-risk investments in other banks. For investors it’s a profit opportunity. For regulators, it’s a potential nightmare.
Li Ka-shing still has what investors want 23 Oct 2013 Asia’s richest man may be an octogenarian but he still knows when to buy and sell. While the listed bits of his empire show a mixed record, Li’s two prized holding companies have matched or beaten the market. That provides valuable pointers as Li readies a new batch of IPOs.
Alibaba creative governance should come at a cost 22 Oct 2013 New York says the Chinese e-commerce group could list with a structure that lets insiders nominate directors. Hong Kong regulators disagreed. The debate is really about the value of shareholder democracy. Investors should be wary of giving up their rights cheaply.
Li Ka-shing still has options after ParknShop flop 21 Oct 2013 The tycoon’s Hong Kong supermarket chain’s mooted valuation of over $3 billion was ambitious. But there are other ways to raise funds for investment. ParknShop might be more palatable as part of an IPO of its parent, Li’s higher-margin giant retail group A.S. Watson.
Cathay-Qantas spat to clear cloudy Hong Kong skies 11 Oct 2013 The city’s dominant carrier is challenging its Australian rival’s plan to set up a local budget operator. The dispute hinges on the vague definition of airline ownership in Hong Kong’s constitution. Greater legal clarity could freeze Qantas out, or spark a competitive scramble.
Alibaba mess ought to prompt Hong Kong IPO rethink 30 Sep 2013 The e-commerce giant’s governance structure ran afoul of the rules. But the saga has exposed gaps in the way regulators handle IPOs. Hong Kong needs to debate the purpose of its policies, whether the ones it has are effective, and how to make the approval process more transparent.