Corporate Governance

Reliance makes clever use of buy now, pay later

4 June 2020

Purchases by installment are hot in retail but the Indian conglomerate is bringing them back to capital markets. Investors buying into a $7 bln rights issue can settle up through November 2021. It sidesteps a Covid-19 cash crunch and boss Mukesh Ambani’s backstop covers up flaws.

Even a chastened SoftBank leans on engineering

2 June 2020

Boss Masayoshi Son is scrambling to clean up his “foolish” and costly WeWork mess. Instead of just selling some Alibaba shares, though, he’s using derivatives linked to them to raise $11.5 bln. The transactions are fiddly, but in this case may be a good use of creative finance.

Chinese online tutor gets lesson in multiplication

29 May 2020

GSX Techedu deflected one sloppy short-seller attack and a second sensational one. A third from Muddy Waters calling the $7 bln company a fraud hit as Luckin buckled and Congress moved on U.S.-listed Chinese stocks. Growing scepticism will require targets to have strong defences.

Bad borrowing habits come home to roost in India

27 May 2020

A London court ordered Anil Ambani, the brother of Asia’s richest man, to pay $700 mln to Chinese banks led by ICBC over a personal guarantee on a loan. The case is indicative of the unorthodox funding practices used by the country’s tycoons. It should help clean up their acts.

Index makeover sets fresh benchmark for Hong Kong

20 May 2020

The main Hang Seng tracker is welcoming companies with secondary listings and dual-class shares, opening the door to Alibaba, Xiaomi and more. That will help diversify baskets overstuffed with banks and such. It also underscores the local bourse’s plight to attract tech startups.

Sony embraces its inner conglomerate

20 May 2020

The Japanese giant is buying the rest of its financial arm for $3.7 bln as part of a broader shakeup. A new holding company structure clumsily tries to reposition Sony beyond its electronics roots. At least it’s managing the sprawl while thumbing its nose at activist Dan Loeb.

Nomura circulates an awkward startup pitchbook

19 May 2020

Boss Kentaro Okuda unveiled his plan for a digitally savvy investment bank catering to entrepreneurs. Buzzwords like AI and disruptive growth accompanied slides full of arcs and arrows. The clunky approach only makes it harder to believe Nomura can pull off this belated strategy.

SoftBank’s clouds come with some silver linings

18 May 2020

A record $12.7 bln annual loss surpassed its warnings. But activist Elliott’s push is yielding results, funds are being spent less giddily and asset sales are on. The board is getting a revamp too, as Alibaba’s Jack Ma exits. The taming of boss Masayoshi Son is gaining traction.

Review: The devil wears Ferragamo

8 May 2020

The life of a junior banker is hell, and Bill Keenan offers a guided tour from his Deutsche Bank days. Through a torrent of Excel emergencies and late-night food deliveries he grasps Wall Street’s rapacious essence. That makes “Discussion Materials” an enjoyable if grating read.

Nomura plays it too safe during downturn

8 May 2020

The Japanese bank posted a quarterly loss of $325 mln as slumping markets dented its asset management unit. Nor did its trading desk produce the sort of bump enjoyed by rivals like Morgan Stanley. New boss Kentaro Okuda has some work to do in restoring Nomura’s killer instincts.

Hong Kong bourse walks fine line on CEO succession

7 May 2020

Boss Charles Li plans to step down by October 2021. Ample lead time helps HKEX shareholders and should ensure a clean handover, but he also risks becoming a long-term lame duck. Finding someone equally able to balance the interests of Beijing and foreign investors will be tough.

China’s big banks socially distance from economy

7 May 2020

ICBC and its hulking peers grew their bottom lines even as GDP plunged. They’re paying dividends, and some even reduced loan loss buffers. Such rude health suggests they haven’t extended sufficient credit to private businesses in need, which may capture Beijing’s attention.

Hong Kong’s reeling companies need a quicker fix

7 May 2020

Local businesses have been battered by Covid-19 and months of protests, but the city still lacks a regime to give them breathing room while they nurse themselves back to health. A mooted Chapter 11-style system will take too long to implement, but other options are available.

Deal squawkers spread their remorseful wings

5 May 2020

A flock of buyers is citing Covid-19 to wriggle out of acquisitions. Legal flaps may determine the fates for targets Moss Bros, Delphi, Metlifecare and a Bed Bath & Beyond business. Despite some questionable arguments, negotiating power favours the yellow-bellied birds of prey.

Mukesh Ambani gives Saudis a run for their money

4 May 2020

A $7 bln rights issue backstopped by the Reliance Industries boss will help keep his promise to cut debt. Although smaller than a delayed deal with Aramco, the discounted stock sale is a record for India. The symbolic significance should instil more confidence amid the pandemic.

HSBC’s dividend policy is ripe for reform

28 April 2020

The UK mega-bank is well-capitalised despite a 48% slump in pre-tax profit and five-fold rise in bad-debt provisions. That’s partly because regulators told CEO Noel Quinn to halt payouts. It’s an opportune moment to link them to earnings and provide flexibility in future crises.

Australia Inc reruns its crisis capital playbook

27 April 2020

Lender NAB will raise $2.2 bln in the biggest local equity issuance since the pandemic began. Just as in 2008, the country is weathering the disruption better than most. Companies Down Under are shrewdly restocking coffers, but often at the expense of retail investors.

Tesla gets board street cred it sorely needs

23 April 2020

Hiro Mizuno, former investment chief at Japan’s $1.5 trln pension fund is joining the electric-car maker as a director. He and Tesla boss Elon Musk may bond over their views on short sellers. But it’s Mizuno’s ESG clout that will serve the governance-challenged manufacturer best.

U.S. Senate boss opens state-finance can of worms

23 April 2020

Mitch McConnell is resistant to giving states more help, especially for their pensions. He prefers letting them file for bankruptcy – currently not allowed. It’s political posturing, but just floating the idea could eventually backfire, including for his own state of Kentucky.

China’s Didi looks short on engine power

23 April 2020

The ride-hailing giant unveiled a three-year plan. Hard-to-compare targets and more of the same bets hardly inspire, especially as tech peers Alibaba and Meituan grab Covid-19 opportunities in health and more. Didi’s $53 bln valuation is vulnerable without a stronger drive.