Archive

Reuters blog archive

from Breakingviews:

WH Group’s revived IPO shows one lesson learnt

By Una Galani

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

WH Group’s revived initial public offering shows it has learnt at least one lesson. After an attempt to sell shares two months ago ended in disaster, the Chinese pork producer has returned, cheaper and with fewer banks working on the deal. But it’s not clear why it is rushing back to market at all.

Compared with the failed attempt to raise up to $6 billion in April, WH Group’s new plan looks positively austere. It will raise no more than $3 billion, with the company valued at between 11.5 to 12 times its forecast earnings for 2014, according to a person familiar with the situation. That seems reasonable against other Chinese consumer stocks. Mengniu Dairy trades at 24 times.

Instead of 29 banks advising on the deal, there are now just two. WH Group’s private equity backers, which own almost half the company, are also no longer driving the listing process. The new offering will be comprised entirely of new shares rather than stock sold by insiders – removing another factor that weighed on the price IPO investors were prepared to pay.

from The Great Debate:

A missed opportunity to ease tensions with China

Chinese Premier Li speaks to U.S. Treasury Secretary Lew next to U.S. Secretary of State Kerry during a meeting at the Zhongnanhai leadership compound in Beijing

Secretary of State John Kerry and Treasury Secretary Jacob Lew traveled to Beijing this week for the annual Strategic and Economic Dialogue, at a time when U.S.-China tensions are running higher than at any point in the past decade. Though each country’s bureaucrats were able to put on a good face and paper over significant disagreements, they were unable to make progress on any major security or economic issue.

Unfortunately, the U.S. administration passed up a chance to advance and elevate the U.S.-China Bilateral Investment Treaty, an agreement that sets the rules of the road for cross-border investment. Doing so could have yielded major economic benefits and had positive spillover effects on the strategic issues vexing both countries. But now, with little for the two sides to hang their hats on, the relationship is ripe for more tension.

from Breakingviews:

Review: Putting a face on China’s vague ambition

By Peter Thal Larsen

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

Can a large country be summed up in a single book? The notion may seem preposterous. When it comes to China, however, too many foreign writers seem determined to try to cram a state of more than 1.3 billion people into a few hundred pages. Few would dare attempt anything similar with the United States, which has a quarter of the population.

from Breakingviews:

Capital flight crackdown would hurt outside China

By Peter Thal Larsen

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

A Chinese crackdown on capital flight would be felt around the world. The government has long tolerated some cash finding its way around the country’s financial border controls. If Beijing decides to plug the leaks then banks, casinos and overseas property markets would suffer.

from Breakingviews:

Internet ads add up for China’s party mouthpiece

By Katrina Hamlin

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

Xinhuanet is an investment rarity: an online media group that is both fast-growing and profitable.  Booming advertising revenue is propelling the digital arm of China’s state-owned news agency Xinhua towards an initial public offering that could value it at close to $1 billion. Its success doesn’t depend on headlines or scoops, but on being the Communist Pary’s main mouthpiece.

from Breakingviews:

Beijing Motor IPO lifts bonnet on China carmakers

By Ethan Bilby 

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

Beijing Motor is offering investors a glimpse under the bonnet of the Chinese auto industry. The carmaker part-owned by Germany’s Daimler is planning a Hong Kong listing it hopes will help it cash in on China’s expanding demand for new vehicles. But its profitability depends entirely on joint ventures with foreign groups. It’s a reminder that China’s car market has two speeds.

from MacroScope:

Balance tilted in Ukraine?

slaviansk.jpgUkrainian forces pushed pro-Russian rebels out of their stronghold of Slaviansk on Saturday. Its re-capture represents Kiev's most notable military victory in three months of fighting in which more than 200 Ukrainian troops have been killed as well as hundreds of civilians and rebels.

The regions of Donetsk and Luhansk are likely to be next in the government forces’ crosshairs.

from Breakingviews:

Review: An American-Chinese morality tale

By Edward Hadas

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

The subtitle of Stephen Roach's new book has an arresting image. "Unbalanced: the Codependency of America and China" describes two economies with mutually reinforcing dysfunctions. This approach is sometimes helpful, but the book's strongest argument concerns the retired Morgan Stanley economist's homeland. He makes a persuasive case that "most of America's deep-seated economic problems...are of its own making."

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:

Hong Kong democracy debate puts business on spot

By Peter Thal Larsen 

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

Hong Kong’s democracy debate has put Western businesses on the spot. Hundreds of thousands of citizens are engaged in a public showdown over a new system for conducting elections in the former UK colony. The standoff has prompted questions about Hong Kong’s future as an efficient and well-ordered financial centre. But warnings of potential disruption miss the point.

  •