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from Breakingviews:

WH Group’s chopped IPO still looks unappetising

By Una Galani

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

WH Group’s chopped initial public offering still looks unappetising. The Chinese pork producer is slashing the size of its Hong Kong fundraising to as little as $1.3 billion, down from a previous target of at least $3 billion. But WH Group’s reluctance to accept a lower price means the IPO remains a tough sell.

The company formerly known as Shuanghui is sticking with its original plan to offer new shares at the indicated range of HK$8 and HK11.75 each. Even at the low end, that values its U.S. business Smithfield at 21 percent more than the $7.1 billion the Chinese group paid barely eight months ago, according to an analysis by Reuters Breakingviews.

That full-fat price is on top of the 31 percent premium that WH Group paid to take control of the U.S. business. The enlarged group claims it can add value to Smithfield by selling more low-cost U.S. pork to Chinese consumers. Yet large institutional investors appear unwilling to pay for value that they can’t yet see.

from The Great Debate:

Obama: Going ‘all in’ for the Asian Century

The reaction in Asia to the dominance of U.S. power is only surpassed by a fear that the United States is in retreat.

As President Barack Obama traveled to Asia Tuesday for a four-country trip, this fear should be foremost on his mind. What many of Asia’s political and cultural leaders  fear most, however, is the United States retreating inward while distracted by crisis after crisis -- from Libya to Syria to Crimea. With China on the brink of becoming the world’s largest economy and the geopolitical puzzle pieces of the China seas seemingly in renegotiation, the Eastern world is asking where Washington stands. This is Obama’s moment to demonstrate the components of his much-heralded, but still largely  undefined, tilt to Asia.

from Breakingviews:

Graft purges don’t hurt shareholders – insiders do

By John Foley 

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

China Resources chairman Song Lin has been sacked for disciplinary violations, leaving an empire with $150 billion in assets leaderless. Though China’s state-company bosses will quake in their loafers, the damage to investors looks manageable. The real problem is a wider culture that treats outside shareholders as an afterthought.

from The Great Debate:

What Beijing can learn from Wal-Mart

“So, how?”

The question, short for “So, how do you want to handle this?” is a common, subtle way to invite someone to offer you a bribe in Asia. A traffic cop pulls you over for running a yellow light. He’s at your passenger window, a leather strap covering his name tag. He tells you to follow him to the police station so he can process your $100 fine. “So, how?”

If you slip 10 dollars into his ticket book -- 20 dollars if you’re a foreigner -- he’ll close it, and you’ll both be on your way.

from Breakingviews:

CITIC’s $37 bln merger hints at SOE reform task

By Una Galani

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

CITIC’s $37 billion merger has shed some light on the gargantuan task of reforming China’s state-owned enterprises. The giant conglomerate is merging its assets, which range from finance to football, into its smaller Hong Kong-listed subsidiary. The result combines listed stakes and a mish-mash of smaller businesses. But if all goes well, CITIC Pacific shareholders will get a profitable ringside seat in the cleanup.

from Breakingviews:

WH Group’s quick pork flip serves up meaty return

By Una Galani 

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

WH Group’s quick pork flip will serve up a meaty return. The Chinese pig producer hasn’t had much time to justify the 31 percent premium it paid for rival Smithfield less than seven months ago. Yet the planned relisting of the enlarged group in Hong Kong implies the value of the U.S. business has risen at least 21 percent.

from Breakingviews:

How China is stoking London’s housing bubble

By George Hay

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

It takes a long trip on the London underground to get to the Aura housing development. From Waterloo Station, 42 minutes tick by until you pull into Edgware, the stop nearest to the half-completed apartment blocks being built on land formerly occupied by a now-bankrupt football club. Attempt the journey at the weekend, when large swathes of the tube are typically shut, and you must make a detour to nearby Canon’s Park station. From there, you face a 15-minute trek taking in a boarded-up pub, a Lidl supermarket and a municipal office block with smashed ground-floor windows. In every sense, you are a long way from what estate agents like to call “prime central London.”

from Breakingviews:

China’s car joint ventures aren’t built to last

By Ethan Bilby

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

Chinese drivers are booming in number, and foreign auto companies have cruised away with most of the sales. But access to what is now the world’s largest auto market has come with a big financial concession: joint ventures with local partners. Those alliances haven’t fulfilled Beijing’s goal of developing competitive Chinese brands. That divided interest could lead to future break-ups.

from Ian Bremmer:

Alibaba, Weibo and China’s potential for growth

In recent weeks, there has been a surge in Chinese tech sector IPOs -- including Alibaba, Weibo and JD.com -- all planning to list on American exchanges. They’re smart to list away from home: doing so will give them access to more liquidity, and allow them to avoid certain restrictions -- like the rule that companies cannot IPO in China if they haven’t yet turned a profit.

There are also compelling reasons for global investors to get excited about these offerings. China’s domestic consumer market is rapidly growing, and e-commerce is perhaps the most robust segment. There were over 6 billion parcels delivered in China in the first nine months of 2013 -- up a staggering 61.2 percent from the same period a year prior. Online shoppers received half of those packages.

from Breakingviews:

Time to bust China’s “omniscient regulator” myth

By John Foley 

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

China’s clever bureaucrats can no more guarantee the health of the country’s financial system than they can see through walls. It is time to bust the myth of the “omniscient regulator”.

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