Asia-Pacific

India may no longer be Narendra Modi’s

4 Jun 2024

His party is on course to lose its majority and will be at the mercy of allies to form a government. It ends a decade of extraordinary stability in the world’s fifth-largest economy. A market selloff hints at the costs of coalition rule. Growth may slow but there are some gains.

Toyota is driving a dangerously fine line

4 Jun 2024

The world's largest automaker shed some $8 bln of market value after revealing problems in testing procedures. It's not all bad, but it adds to a heap of governance gripes ahead of this month's AGM. And probes may yet uncover more. Chair Akio Toyoda looks particularly exposed.

Modi 3.0 offers limited opportunities for the West

3 Jun 2024

Western leaders’ hopes for India as a bulwark against China outweigh their concerns about Narendra Modi’s authoritarian streak. They will have more scope to work with the prime minister during his expected third term. But the overlap of interests and values is limited.

A Shein London IPO would require careful stitching

3 Jun 2024

The fashion giant could file to go public in the city this week after its New York listing hit a snag, per Sky News. Its Plan B could yet unravel: UK lawmakers are seeking greater scrutiny of the China-founded firm, last valued at $66 bln. A Plan C may be necessary.

India’s leader faces a reckoning with its poor

3 Jun 2024

Exit polls suggest Narendra Modi will secure a third term with a big majority. Raising rural incomes will be high on his to-do list. Consumption is growing at 4%, making the nearly 8% GDP pace look shaky. Fixing that will boost India's reliability as a global trade partner too.

Korea’s music industry has more than a BTS problem

31 May 2024

Shares in entertainment firms like Hybe and SME have slumped along with CD sales since members of top K-pop group BTS left for military service. They reunite next year, but a sluggish economy and shaky China sales mean top labels can’t afford to assume business is bulletproof.

China property bailout stars align for Vanke

31 May 2024

The country's biggest homebuilder is close to borrowing up to $10 bln. That'd effectively eliminate default risk. Being part-owned by Shenzhen helps, as does having some decent assets to entice lenders. The clincher is Beijing's heightened will to put a floor under house prices.

Japan’s luxury boom sparks wishful China thinking

30 May 2024

LVMH and Prada have reported stellar sales in the country, while Richemont’s CEO hailed China’s resurgent overseas shopping as one reason for a 20% annual revenue bump there. But those big spenders have yet to return to pre-pandemic habits. A weak yen deserves more credit.

Korea’s short-selling aversion mars reform push

30 May 2024

Seoul doesn't want to allow the practice until it stamps out so-called naked illegal trades in the $1.9 trln market. But the problem is overstated and jars with a push to unlock shareholder value. The government's pandering to retail investors only hurts them in the long run.

Failed Anglo bid is net negative for BHP CEO

29 May 2024

Mike Henry has ditched the Australian miner’s $47 bln attempt to buy its UK-listed rival. He misjudged the difficulty of pushing Anglo to divest South African assets. But he avoided upsetting investors by overpaying, and if his target’s breakup plan falters he can try again.

Saudi expands strategic toolbox with Lenovo deal

29 May 2024

A PIF unit is the sole investor in the laptop maker’s $2 bln convertible bond. It pays no interest and can’t be swapped for stock until 2027. The real value to the kingdom is Lenovo’s pledge to build a new factory and regional HQ there to bolster Riyadh’s manufacturing goals.

Toyota investors can give chair a year for tune-up

29 May 2024

Proxy advisers Glass Lewis and ISS want shareholders not to re-elect Akio Toyoda atop the $300 bln automaker’s board. There’s logic to it. But the former CEO has pledged to address governance problems at subsidiaries. If he doesn’t, it makes a stronger case for booting him out.

Rio Tinto’s dual listing belongs in history books

28 May 2024

Activist fund Palliser is overegging the 44% boost holders of the miner’s London stock could get if Sydney became its primary bourse. But there’d be some uplift. And CEO Jakob Stausholm could use a more level M&A playing field as BHP potentially kicks off a wave of consolidation.

China cashes in banking chips for tech drive

28 May 2024

Beijing's latest $48 bln semiconductor fund is its third and largest. Unlike earlier efforts, which have relied on cash-strapped local governments, the fund counts major lenders like ICBC as investors. It marks a new and riskier phase of China's tech self-sufficiency ambitions.

Japanese funds will unlock powerful virtuous cycle

28 May 2024

Pushy foreigners helped boost short-term value in the Nikkei stock index. In this Exchange podcast, Hiroyuki Otsuka, CEO of Newton Investment and ex-Carlyle executive, explains how local asset managers will create the next wave of gains and usher in dramatic change for Japan.

ESR buyout showcases depths of Hong Kong misery

27 May 2024

The $6 bln Asian real estate fund manager is mulling a take-private bid. While its complex business has been hit by high interest rates, a 60% fall from the stock's 2021 peak looks harsh amid a promising turnaround. Shareholders like OMERS can push for a high premium.

Japan’s new widowmaker trade may have shorter life

23 May 2024

For more than two decades, investors who bet against Japanese government bonds lost their shirts. Taking a long position in the yen has been similarly painful recently as the currency dropped by 50% against the dollar. Yet there are several reasons why the slide could reverse.

China’s 25% bond spike shows rational exuberance

23 May 2024

Retail investors pushed up prices of 30-year sovereign notes on their debut. The brief surge echoes how they receive IPOs and underscores voracious demand for safe havens. It will tempt Beijing to channel excessive savings of households into the $4 trln government bond market.

Copper’s M&A mania obscures a dysfunctional market

23 May 2024

The red metal is the main driver of BHP’s $46 bln bid for Anglo American. But despite expectations that the energy transition will boost demand, prices are still too low to tempt miners into expanding production. Mergers may help break the deadlock, but aren’t certain to do so.

A weaker Modi may not be too bad for India

23 May 2024

Business leaders were betting on a thumping win for the premier's party in the ongoing election and policy stability for five more years. Market volatility suggests some uncertainty. If the BJP cedes seats, India's growth may lose some momentum but there are potential gains too.