HONG KONG (Reuters Breakingviews) - A lengthening list of lowball offers for U.S.-listed Chinese companies could provoke a healthy legal feeding frenzy. China Biologic is the latest take-private target facing an underwhelming bid. Dockets in the Cayman Islands, where most of the entities are domiciled, are filling up with shareholder complaints about similar deals. Hopefully miring buyers in lawsuits will encourage future acquirers to pay more up front.
HONG KONG (Reuters Breakingviews) - Alibaba’s relationship with Hong Kong has been a rocky one. Tensions range from the Chinese e-commerce giant’s 2013 decision to snub the city and take its then record-setting $25 billion initial public offering to New York, to last month’s shock suspension of financial technology affiliate Ant’s giant stock sale. And yet the two have plenty to celebrate on the one-year anniversary of the company’s landmark secondary listing.
HONG KONG (Reuters Breakingviews) - Walmart’s sale of a majority stake in its Seiyu supermarkets is an example of how a global health crisis can accelerate change even in the stodgiest of markets. The U.S. retail giant is offloading 65% to private equity shop KKR and 20% to Seiyu’s Japanese e-commerce partner Rakuten, retaining 15% for itself and valuing the business at $1.7 billion. The new owners are betting that an increase this year in online buying by Japan’s picky shoppers is only the beginning of a good growth story.
HONG KONG (Reuters Breakingviews) - Chinese property developers have found a new way to build themselves up. Many are rushing to list management units in Hong Kong. At least 10 have floated this year with two currently selling their shares to investors and six more, including one from Evergrande, in the queue. The asset light businesses offer exposure to China’s property market without the usual policy risk – just as Beijing imposes tough caps on developers’ leverage. It only goes so far to justify managers’ towering valuations.
HONG KONG (Reuters Breakingviews) - When future business school students tackle the case study of Ant and the Curse of the Mega-IPO, it will be clearer what led to the shock suspension of the Chinese financial group’s record-shattering $37 billion initial public offering a mere 36 hours before its shares were due to begin trading. In the meantime, Ant founder Jack Ma can perhaps console himself with the thought that other big companies have faced difficult market debuts but gone on to trade perfectly happily.
HONG KONG (Reuters Breakingviews) - Everyone and their cousin wants in on Ant’s record-shattering $34 billion initial public offering. The buzz has been palpable in Hong Kong, where fund managers report calls from distant relatives hoping to buy shares of Jack Ma’s Chinese financial technology giant. Retail investors in the Asian financial hub placed orders worth $168 billion while the Shanghai portion attracted bids from small investors worth $2.8 trillion. The fear of missing out is a powerful drug, but a letdown potentially awaits.
HONG KONG (Reuters Breakingviews) - HSBC is doing its best to power through the storm. The 36% decline in third-quarter pre-tax profit from a year earlier, to $3.1 billion, was better than feared thanks in part to choppy markets and modest loan provisions. Boss Noel Quinn’s plan to wring more fees out of customers is also welcome. He is up against more than just central bankers, though.
HONG KONG (Reuters Breakingviews) - Technology firms, particularly finance-focused ones in China, are used to operating at the cutting edge of regulation. But overconfidence is always a risk, as Chinese fintech champion Ant has discovered after watchdogs started probing its initial public offering process.
HONG KONG (Reuters Breakingviews) - The reason for Kioxia’s decision to pull its $3.2 billion initial public offering on the eve of pricing depends on who you ask. The world’s second largest maker of flash memory chips said it was down to market volatility and pandemic uncertainties. Analysts highlighted the punchy valuation sought. Others pointed to the problems of its sales to Huawei, battered by U.S.-China trade tensions. Whatever the reason, the biggest loser is Japan’s Toshiba, which needed a pick-me-up.
HONG KONG (Reuters Breakingviews) - Pegged currencies are irresistible to speculators, and the Hong Kong dollar’s 36-year-old fix is no different. Since political strife erupted in the territory last year, investors like Kyle Bass, founder of Dallas-based Hayman Capital Management, have been betting that capital flight will break a narrow band. But Ant Group’s $30 billion-plus float and other expected Chinese technology listings are drawing inflows, strengthening the currency and creating headaches for doomsayers.