Asia-Pacific

Global slowdown splits Bangalore’s IT industry

25 Jul 2012

In boom times, all the region’s IT outsourcers could grow in tandem. But in today’s climate, the industry is in a fight for market share. TCS and HCL look to be on top, but don’t rule out a revival at Infosys and Wipro. The manifest competitive tension is good for everyone.

IMF gets quasi-Goldman resignation moment

24 Jul 2012

Greg Smith’s public rant triggered fresh scrutiny of the Wall Street firm even though he said nothing new. So it could be with Peter Doyle, a 20-year IMF economist. His exit blast is causing internal soul-searching. Yet no-one should be surprised to hear that the fund is flawed.

CNOOC’s state control is a paper tiger

24 Jul 2012

The bidder for Canada’s Nexen is the smallest and most Western looking of China’s three oil majors. Moreover, lines of power between China’s oil producers and politicians run both ways. CNOOC may have a gusher of governance anomalies, but foreign regulators have little to fear.

China Inc not letting politics get in way of M&A

24 Jul 2012

A once-a-decade changing of the Communist Party’s top guard was supposed to hold back the ambitions of state enterprises, at least temporarily. But CNOOC has now kicked off a hefty $15 bln outbound takeover. Maybe, seen from Beijing, there’s no such thing as a bad energy deal.

Baidu suggests China’s SMEs surprisingly resilient

24 Jul 2012

Small companies were the main reason the search engine’s earnings jumped 70 percent in the second quarter. New manufacturing data too suggests SMEs aren’t so distressed. Easier credit might have played a role, but fear over the plight of Chinese small businesses seems overdone.

Malaysia’s IPO bonanza may be deceptive

24 Jul 2012

With IHH and Felda, Kuala Lumpur boasts this year’s two biggest deals after Facebook. And more are coming, including the world’s biggest condom maker. But idiosyncrasies of the market, an export-reliant economy and fractious pre-election politicking should give investors pause.

CNOOC has work cut out to justify Nexen premium

23 Jul 2012

At $17.9 bln, the Chinese oil giant is valuing its Canadian rival’s enterprise at almost 4.5 times estimated 2012 EBITDA. That’s on par with Nexen’s peers even though it has been trading at a big discount. For CNOOC to get its money’s worth will require a major turnaround.

Risk appetite set for brutally hot Spain vacation

23 Jul 2012

Distress in Spanish regions and new fears for Greece have broken the markets’ summer calm. Italy’s spreads have overtaken Ireland’s. Until external support for Spain is clarified, stocks, commodities and the euro may pay. Yet again, the dollar, yen and safe-haven bonds will win.

CNOOC pulls out stops to make Nexen bid palatable

23 Jul 2012

The Chinese oil giant is paying $15.1 bln for the Canadian producer, a whopping 61 pct premium. The deal also comes with sweeteners to placate protectionists, including CNOOC promises of a secondary HQ in Calgary and a listing in Toronto. It will be hard for Ottawa to say no.

Can Citic avoid the investment bank buyer’s curse?

23 Jul 2012

The Chinese securities firm is paying $1.3 bln for Credit Agricole’s CLSA. Avoiding another Dresdner/Wasserstein, Nomura/Lehman or Credit Suisse/DLJ would be hard for any bank - much less one controlled by Beijing. Arm’s length management alone is unlikely to make this deal different.

Don’t rule out a future SGX bid for LSE

23 Jul 2012

Singapore’s bourse denies holding deal talks with the London Stock Exchange. That’s no surprise: most recent stock-exchange M&A has failed, and the LSE is mid-way through an important move into clearing. Still, an eventual $5.7 bln offer could make financial and strategic sense.

Anil Ambani under pressure after IPO flop

23 Jul 2012

Reliance Communications’ shelving of a $1 bln listing for its undersea cable assets is an embarrassing setback for its majority owner. And it heaps even further pressure on the badly indebted Indian telco. With Anil’s brother sitting on a cash pile, is it time to phone a friend?

Manila is pillar of Southeast Asian strength

23 Jul 2012

Upgraded forecasts from the World Bank and IMF vindicate investor enthusiasm for an economy once known as Asia’s sick man. With Philippine markets roaring, President Aquino is loosening his belt to boost infrastructure and offset slowing global growth. He can afford to do more.

Heineken tries to take the Asian Tiger by the toe

20 Jul 2012

The Dutch brewer launched a $6 bln bid to take control of Asia Pacific Breweries, its longtime Asian partner and Tiger brand owner, pitting it against a thirsty Thai beer mogul and Kirin. It’s a bold move for conservative Heineken that will test Singapore’s corporate governance.

Gujarat holds key to Suzuki’s Indian labour crisis

20 Jul 2012

The Japanese carmaker’s flagship Indian venture is beset by ongoing labour unrest. Problems at its Haryana plant echo squabbles at Tata in West Bengal. But an enterprising Gujarat may come to Suzuki’s rescue as it did for Tata Motors.

Chinese MBO boomlet may take necessary breather

19 Jul 2012

Depressed shares of U.S.-listed Chinese firms had attracted management buyouts from founders - a rare bright spot for bankers. But the troubles of New Oriental Education - an SEC probe, short-seller allegations and 60 percent stock slide - are likely to halt this trend for now. 

How can India’s Liquor Baron keep his Kingdom?

19 Jul 2012

Vijay Mallya’s woes at Kingfisher Airlines are infecting the rest of his empire. The airline’s debt is backed by guarantees from his holding company. Unless he saves Kingfisher, he risks losing another jewel in his crown. And Diageo and Heineken are waiting in the wings.

Thai Bev dons beer goggles for taste of Tiger

19 Jul 2012

Thai Beverage has spooked Heineken by paying $3 bln for a piece of the Dutch brewer’s Singaporean partner. It is paying a hefty premium and racking up big debts for less than a fifth of the target. It needs more to make the finances stack up. That will be a tall order.

Heineken can’t let Asia Pacific Breweries get away

18 Jul 2012

A Bangkok beer mogul has upset the equilibrium in a JV that’s been key to the Dutch brewer’s Asian footprint since 1931. Thai Bev is jockeying to take control of Fraser and Neave from Singaporean bank OCBC. Heineken may need to dig deep to ensure its position in the region.

China investors get wise to a new four-letter word

18 Jul 2012

Really it’s an acronym: VIEs. These are the structures used by half of Chinese firms listed on the Nasdaq to get around restrictions at home. The SEC’s probe of New Oriental Education may sound their death knell. In the end, that’s probably best for investors - and for China.