Asia-Pacific

Blackstone $16 bln AI deal borrows from SPAC boom

5 Sep 2024

A group led by Steve Schwarzman’s firm is paying a large sum to buy data centre operator AirTrunk from Macquarie. By tinkering with EBITDA, the buyer can present a low valuation multiple for a purchase in a hot sector. It's unnecessarily reminiscent of the blank-cheque froth.

Seven & i deal will test Japan’s financial renewal

5 Sep 2024

Couche-Tard’s takeover interest in the 7-Eleven owner is a pivotal moment for the country’s efficiency drive. In this Viewsroom podcast, Breakingviews columnists explain why Tokyo ought to wait to see how the target reacts before opining, and how a deal could easily turn hostile.

Clouds gather over China’s needed solar mergers

4 Sep 2024

Earnings from $12 bln cell giant Tongwei underscore the industry's harmful overcapacity. Its deal to acquire a smaller rival may not provide relief, however. The target's local government investors may complicate any right-sizing. Offshore assets look like the real draw.

Trade War II will be easy to lose for China

4 Sep 2024

The hit to its exports from higher US tariffs threatened by Presidential nominee Donald Trump would be severe. Beijing’s failure to abide by the terms of past truces will make de-escalation hard to achieve, so will its determination to export its way out of a growth slump.

7-Eleven owner faces an inconvenient value truth

3 Sep 2024

Seven & i shares leapt on Couche-Tard's approach but trade at a big discount to the sum of its parts. Boss Ryuichi Isaka can speed up his existing strategy but has failed for years to unlock value. New owners have a better shot at helping the $38 bln retailer reach its potential.

Murdoch’s UK property gambit has a price ceiling

2 Sep 2024

Australian property listings site REA Group is eyeing $6 bln UK peer Rightmove. The News Corp-backed suitor can use cash and higher-valued shares to pay a 30% premium. Beyond that, Rupert Murdoch’s outfit might struggle to combine a successful bid with keeping him in control.

China GDP hiccup would have long-term aftershocks

2 Sep 2024

This year’s growth target of “around 5%” faces headwinds. It’s now more a planning tool, so a miss might not seem as consequential as when the goal was all but compulsory. But a slowdown would probably prompt new policies to keep alive 2035 plans like doubling per-capita income.

Raw economics will trump migration’s sour politics

2 Sep 2024

Nearly 900 mln people would like to live in another country, but most can’t move due to political and social opposition to foreigners. These attitudes are hard to shift. But deepening demographic crises mean a migration-fuelled boost to labour supply is critical for growth.

India’s food inflation debate will get spicier

2 Sep 2024

Governor Shaktikanta Das shot down an idea from New Delhi to strip food costs from the central bank's price target. Ignoring the item would allow the RBI to trim rates and combat slowing GDP growth. It would also hurt the poor. As inequality rises, so will pressure to bend.

Reliance can afford to sit out India’s IPO boom

30 Aug 2024

The annual meeting of Mukesh Ambani’s $245 bln behemoth offered few of the customary big-bang announcements. He's not rushing to fulfil promises made to backers KKR and Meta to list his telecom and retail units. A slim conglomerate discount makes waiting easier for everyone.

Aussie exports could do without education squeeze

30 Aug 2024

The government wants to cap visas for new overseas learners, its fourth-largest source of foreign income. The policy has some merit but makes immigration, which includes student visas, a scapegoat for economic woes. With top exports like iron ore under pressure, it’s ill timed.

How HSBC can heal the scars of its CEO battle

29 Aug 2024

The $160 bln lender’s retail and wealth head Nuno Matos left after losing out on the top job to Georges Elhedery. The bank now has an empty CFO post, and a lack of potential future leaders. Recruiting heavy-hitting outsiders, like Citi’s Jane Fraser has done, would help.

China is fixing housing market with a long gaze

29 Aug 2024

Only 4% of a $42 bln lending scheme to help mop up excess inventory has been drawn upon since May. Other new policy shifts, such as ditching housing presales, could extend the property slump. Beijing is determined to remodel the sector, even if it requires more time and pain.

Carry trade chaos charts outlines of next selloff

28 Aug 2024

BIS researchers reckon cascading margin calls helped turn a local Japanese wobble into a global rout in early August, eventually wiping $1 trln off US tech stocks. It’s a similar story to a March 2020 slump and 2022’s UK bond collapse. Worse, the core drivers remain in place.

Poison pills will hurt Seven & i and Japan

28 Aug 2024

The 7-Eleven owner wants the government to discourage dawn raids on its stock to help defend against a Couche-Tard takeover, per Bloomberg. Such protection would undermine Tokyo's shareholder value push. With other bidders likely, the best course is to encourage a fair process.

PDD black box morphs from magical to alarming

27 Aug 2024

The Chinese e-commerce firm more than doubled earnings, mysteriously defying an economic slump. But sobering comments from Chair Chen Lei on the sustainability of profit erased $55 bln of market value. The Temu-owner could ease the pain of a slowdown by being more transparent.

Japan can afford to keep quiet on 7-Eleven bid

27 Aug 2024

Convenience stores play a special role in the country, so the government must approve any takeover of parent Seven & i by Canada’s Couche-Tard. A veto would undercut an official governance push. Still, the bidder must clear big hurdles before it puts politicians on the spot.

China steel woes will recast miners’ M&A desires

27 Aug 2024

Buying copper-heavy Anglo American would have helped BHP CEO Mike Henry reduce the $140 bln miner's dependence on iron ore. With the steel industry facing a "harsh winter", deals must look ever-more appealing to BHP, Rio and others. But stock price drops make tie-ups more costly.

KKR bank sale will gauge India’s fee-paying power

26 Aug 2024

The sponsor is looking for a buyer for Avendus, an investment bank rising up league tables and advising on hot deals, possibly including Swiggy's $1.2 bln IPO. It's a good time to push a sale of the tech sector's banker of choice after an earlier attempt to offload it stalled.

China’s big ball of money has nowhere else to go

23 Aug 2024

Beijing's warnings slowed a rush into government debt sparked by moribund stocks and falling home prices. With US rates set to fall, investing more abroad would be an option if it weren't for capital controls. Unless they're relaxed, the bond-buying frenzy is likely to restart.