Corporate Governance

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 Apr 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 Apr 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 Apr 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 Apr 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 Apr 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.

Virgin Australia could struggle to regain altitude

21 Apr 2020

The carrier has gone into administration with over $3 bln of debt after a bailout failed to materialise. Australia is loath to leave Qantas a monopoly, which should help spur a solution, maybe with local pension funds. Remaking Virgin into a success is a different story, though.

Spurned Caltex can do some refining on its own

21 Apr 2020

Canada’s Couche-Tard abandoned its $5.5 bln plan to buy and break up the petrol station operator because of the pandemic. The Australian company’s mooted property spinoff looks like a poor consolation prize. It would make more sense just to proceed with the suitor’s blueprint.

Singapore oil trading mess creates a long slick

20 Apr 2020

The founder of Hin Leong Trading, O.K. Lim, fessed up to hiding $800 million in losses. That’s bad for auditors and the banks holding $3.9 bln of related debt. It’s also tricky for the city-state’s status as an energy hub, and perceptions of privately held commodities firms.

Japanese hospitality has a long way to go in M&A

20 Apr 2020

Lone Star is buying Unizo, ending a process marred by murky disclosures, a lack of engagement with bidders and conflict of interest allegations. Lawmakers last year introduced guidelines to make takeovers fairer, but the tussle suggests boards may need a bigger kick.

India’s Tatas crack open $84 bln piggy bank

17 Apr 2020

Tata Consultancy is nearly quintupling its dividend, handing $685 mln to the Tata Sons parent company. The money could help fund charities and other weaker parts of the empire. Cash-rich and with no plans to cut jobs, the IT services provider can afford to try and have it all.

A Chinese investment megabank looks big, not bad

15 Apr 2020

State-backed Citic Securities and CSC could merge in a $70 bln deal. The resulting giant could fend off encroaching foreign rivals like Goldman, plus consolidate a fragmented local industry. The trick will be generating synergies despite inevitable turf wars and culture clashes.

Treasury Wine’s posh-plonk split calls for a toast

9 Apr 2020

The $5 bln Australian winemaker could spin off its prized Penfolds business. That should deliver a higher valuation for the upmarket label and separate it from a ragbag of other brands that need restructuring. A coronavirus-induced glut of luxury grapes will eventually help, too.

Climate fight at Mizuho previews wider clash

9 Apr 2020

An investor group is urging the $29 bln finance giant to reduce lending for coal. With Japan in a state of coronavirus emergency, it’s an odd time to pick this battle, nor is Mizuho in charge of national energy policy – the real problem. But activists have to start somewhere.

Wall Street stuck with Luckin Coffee dregs

7 Apr 2020

Morgan Stanley, Credit Suisse and others face big losses after the founder of Starbucks' Chinese rival defaulted on $518 mln of loans amid fraud charges. The lenders are stuck offloading a huge stack of share collateral in a falling market. It’s the price of blindly chasing fees.

HSBC retail investors pick odd time for a fight

6 Apr 2020

Thousands of Hong Kongers are rallying to act against the UK bank for halting dividends. The lender has complex ties with the Asian hub, where it makes most of its profit. The city needs more grassroots activism. But at a time of profound uncertainty, the agitation lacks class.

Three deals that can measure India’s pulling power

6 Apr 2020

Mukesh Ambani’s Reliance Industries and the Tata group want partners for businesses from oil and chemicals to consumer tech and cars. The success of stake sales by the country’s A-list will be a key measure of India’s attractiveness to foreign investors in a post-virus world.