Hong Kong

China’s value push may bridge a Hong Kong gap

12 Jun 2024

The yawning premium of onshore stocks to their offshore equivalents is easing. A push by top market regulator Wu Qing for higher dividend payouts and Chinese investors' anxious hunt for yield could further narrow the gap. Watch out for more southbound buying.

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.

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.

Ping An wrestles with its HSBC dilemma

17 May 2024

The bank's top owner may reduce its 8% stake a year after its breakup bid failed. It's a fair move given the recent bumper returns and looming succession and growth issues. But HSBC's dividends and arguable undervaluation suggest Ping An won't trim its outsized holding too much.

Hotpot IPO looks too mild without China spice

17 May 2024

Singapore-based Super Hi has distanced itself from its Chinese roots ahead of a $50 mln US offering. That's prudent, given scrutiny on companies like Shein and ByteDance. Yet without support from former parent Haidilao, the firm may struggle to stand apart from larger peers.

HSBC’s big pair of shoes will be hard to fill

9 May 2024

The surprise departure of boss Noel Quinn, who dramatically reshaped the firm, puts the globe-straddling bank on the spot: appoint a steward of its strategy from within, or a new thinker from outside? In this Viewsroom podcast, Breakingviews columnists debate the $170 bln choice.

China banks’ $900 bln buffer offers sham comfort

7 May 2024

That’s roughly how much special debt the country’s five largest lenders must raise to obey global rules for absorbing large-scale losses. It’s an improbable scenario in China’s state-controlled financial system. For the banks, extra funding costs add to a long list of headaches.

HSBC’s ideal new boss probably doesn’t exist

6 May 2024

CEO Noel Quinn’s replacement should be familiar with the $167 bln group, have experience of Western and Asian markets, understand wholesale banking, and be available. None of the potential candidates score full marks. Chair Mark Tucker may have to compromise to fill the vacancy.

China property fix aims to restock speculation

6 May 2024

Reducing unsold inventory is Beijing’s latest directive and replaces the mantra “houses are for living in, not for speculation”. It’s a prelude to removing some investment curbs. Allowing people to get rich off the sector is a necessary evil to restore overall confidence.

FOMO finally returns to Chinese equities

3 May 2024

After a $5 trln crash, a bull market in Hong Kong and surging inflows to mainland bourses are prompting some investors to up their allocations. Policy support from Beijing, buying by long-only funds and attractive valuations suggest the start of a long road to recovery.

Unilever and Nestlé offer two flavours of India

2 May 2024

Weak rural demand ate into earnings at the $63 bln local unit of the Dove soap maker. By contrast, its smaller and more-richly valued Swiss rival grew profit thanks to a larger share of urban customers. The divergent fortunes point to the limits of the Indian consumer’s wallet.

CEO departure puts HSBC at risk of strategy drift

30 Apr 2024

Noel Quinn is retiring from the $164 bln bank after less than five years in charge. If Chair Mark Tucker picks an internal replacement the new broom risks looking like a second choice. Appointing an outsider could leave HSBC without clear medium-term targets for a year or longer.

L’Occitane sets a high bar for Hong Kong exits

30 Apr 2024

Chairman Reinold Geiger’s offer to take his skincare group private values it at 6 bln euros, a decent 30% premium. Funding led by Blackstone might help keep a lid on interest expenses while the company restructures and seeks a listing in Europe. Other buyouts will be trickier.

New Hong Kong bourse CEO needs everyone onside

24 Apr 2024

Anaemic trading activity has halved the market operator’s share price, and first-quarter earnings show it can no longer count on investment income to cushion the blow. There are early signs Bonnie Chan may get support from Beijing to turn things around. Hong Kong can do more too.

Hong Kong catches tantalising glimpse of future

12 Apr 2024

The city's airport had its busiest week since 2020 thanks to the Rugby Sevens and HSBC's inaugural investment summit. Yet many Hong Kongers spend their free time on the mainland. As the hub generates some of its old buzz, politics and pragmatism drive it closer to its neighbour.

Hong Kong’s latest problem is a 99% nosedive

10 Apr 2024

That’s how much shares in cement maker China Tianrui fell in 15 minutes, erasing some $1.9 bln of value. It’s not the first such plunge on the city’s bourse, and at present outsiders can only guess at its cause. It’s a reminder that governance and transparency still need work.

‘Wilful default’ bond spat can shake Hong Kong

5 Apr 2024

A group of creditors including Asian buyout firm PAG say an education firm can but won't redeem a $315 mln offshore debt. It's unusual amid the surge in defaults by Chinese issuers, and suggests investors need to worry about better parts of their portfolios too. 

BYD is unscathed in China’s electric-car wars

27 Mar 2024

The world’s largest EV maker founded and led by Wang Chuanfu is winning market share and accelerating its profit margins. That suggests the $86 bln company can keep cutting prices and investing overseas despite reporting its slowest quarterly profit growth in two years.

Hong Kong property tycoons send warning by waiting

22 Mar 2024

A home price slump has left blue-chip real estate firms like New World trading at their lowest valuation since 2003. Back then, it sparked a rash of shareholder buyouts. This time round, property magnates remain on the sidelines, suggesting the market has further to fall.

Samsonite books a test flight out of Hong Kong

22 Mar 2024

The $6 bln luggage maker is planning another listing in addition to the Asian financial hub where its shares have long suffered from low liquidity. A resulting valuation uplift might be enough to convince potential suitors including KKR and Carlyle that a buyout could make sense.