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from Breakingviews:

The perks and pitfalls of depending on Jack Ma

By John Foley 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Buy a share in Alibaba and you place your trust in Jack Ma. The Chinese e-commerce giant’s founder, executive chairman and spiritual sultan will remain a controlling force even after the company completes its massive initial public offering later this year. The $100 billion-plus question for prospective shareholders is whether they can depend on him to always act in their best interests.

Given Alibaba’s success, the question may sound absurd. Under Ma’s leadership, the Hangzhou-based retail marketplace has grown into a colossus. Almost 85 percent of China’s e-commerce activity passes through its Taobao and Tmall platforms. Revenue in the first quarter of 2014 increased 39 percent to 9.4 billion yuan ($1.5 billion). When the long-awaited IPO debuts in September, it could be one of the largest ever, likely surpassing the $16 billion raised by Facebook in 2012.

But the company and Ma are at a turning point. After years of expanding its market share, Alibaba is now under attack from Chinese rivals like JD.com, which resembles Amazon. The group is straying into new areas from mobile messaging and maps to cable TV and football. It has spent at least $7.3 billion on acquisitions since January 2014. What Alibaba’s leader does next is integral to the company’s value.

from Breakingviews:

China’s “De-IOE” campaign takes a bite out of tech

By Rob Cyran 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

China’s “De-IOE” campaign is taking a bite out of some Silicon Valley stalwarts. For those unfamiliar with the term, it’s being used by tech executives to describe Beijing’s nudging of state enterprises to wean themselves off U.S. software and service firms, chiefly IBM, Oracle and EMC. The drive, which has been going on for at least a year, but accelerated after Washington indicted Chinese army officials, has dimmed the brightest star in Big Tech’s otherwise dull constellation.

from Breakingviews:

Chinese internet stocks deserve their discount

By Robyn Mak 

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

China’s internet stocks are red hot but investors would rather pay more for their U.S. counterparts. Shares of Chinese companies including gaming and social media giant Tencent and search engine Baidu trade at lower multiples than those of Facebook, Google and other American dotcoms when expected earnings growth is taken into account. The discount is deserved.

from Breakingviews:

Alibaba is case study in U.S.-China legal gulf

By Richard Beales

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Alibaba’s coming U.S. initial public offering will probably value the Chinese e-commerce firm at more than $100 billion. But will shareholders actually own the business? That’s the timely concern raised by a U.S. congressional commission. Lack of clarity in PRC law is mainly to blame.

from Breakingviews:

Triple financial mystery remains unsolved

By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The world of finance is ensnared in a triple mystery: falling bond yields, falling inflation and rising debt. The ignorance is dangerous.

from Breakingviews:

Hurrah for low volatility, a sign of saner markets

By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Traders are moaning about the extraordinary calm which has beset financial markets. Everyone else should be happy at what looks like an inadvertent outbreak of common sense. If only it could last.

from Breakingviews:

China-U.S. cyber spat risks corporate casualties

By Ethan Bilby

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

China’s security spat with the United States risks corporate casualties on both sides. The People’s Republic has responded to U.S. allegations of cyber spying by targeting American tech companies. A continuing dispute could lead to blocked deals in the United States and lost sales in China. Though companies can try to ease concerns, it’s hard for them to escape a political escalation.

from Breakingviews:

U.S. firms get caught in China spying crossfire

By Ethan Bilby

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

It’s almost a year since U.S. President Barack Obama and his Chinese counterpart Xi Jinping held a cordial “shirt-sleeves summit”. When it comes to the two countries’ internet rivalry, however, bare knuckles have replaced bare forearms. Last week’s indictment by the United States of five Chinese army officers as alleged cyber spies has prompted a backlash against American companies. China’s weapon is shutting them out from future growth.

from Breakingviews:

Review: Brazil’s toughest tests lie off the pitch

By Dominic Elliott 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Michael Reid’s astute new book has a stark warning: the country of samba, sex and soccer is teetering on a knife-edge. “Brazil: The Troubled Rise of a Global Power” explains why protests against this year’s World Cup are turning increasingly violent. Reid, a journalist for The Economist, persuasively urges a return to the broad liberal consensus that served Brazil so well between 1994 and 2006.

from Breakingviews:

Pfizer tax arbitrage will hasten more deals

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Pfizer’s $99 billion tax arbitrage bid will encourage copycats. The biggest charm of the U.S. drug giant’s offer for AstraZeneca of the UK lies in switching to a lower-tax domicile. The latest and largest such deal to hit the headlines raises the odds Congress will tighten rules – but not yet.

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