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from Breakingviews:

JD.com wins rich price despite poor governance

By Robyn Mak 

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

JD.com has achieved a rich price despite poor governance. China’s second largest e-commerce group priced its shares above the expected range on May 21, raising $1.8 billion. Investors in the initial public offering seem unfazed that the company just disclosed a 5.3 billion yuan ($849 million) loss in the first quarter of 2014, caused by a gift of stock to the company’s chief executive officer. Such a large and unexplained act of generosity should raise red flags.

At the price of $19 per depositary share – worth two ordinary shares – the company is worth over $25 billion. Assuming its top line grows at the same 31 percent rate as the Chinese market is forecast to expand this year, that suggests a valuation of 1.7 times forecast revenue for 2014. Amazon, in comparison, trades at 1.5 times the same year’s sales. That looks reasonable given rapid growth.

Profit, though, is elusive. JD.com in March revealed that it had rewarded chairman and chief executive officer Richard Liu some 93.7 million more shares, which it quaintly referred to as “immediately vesting restricted stock units”. But on May 19 it said that the one-off expense would create an accounting hit of $591 million. That’s on top of the losses it is already making from investing heavily in its logistics network.

from Breakingviews:

Russia puts gas-hungry China in a bear hug

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

Russia has signed a long-awaited gas pipeline deal with China, and it leaves the People’s Republic in a bear hug. Russia gets a new market outside the increasingly frosty European Union. Oil major PetroChina gets to balance out some losses from low regulated prices at home. But the optics of the deal shred Beijing’s pretensions to political neutrality.

from MacroScope:

Elusive China gas deal

Vladimir Putin is well into his second and final day of a trip to China during which he was hoping to sign a long-sought gas deal with Beijing. There’s no sign of white smoke so far and if the Russian president leaves empty handed it would be a serious blow.

Gazprom has repeatedly said negotiations are in their final stages but it seems there has been no agreement yet on price and Moscow may have to lower its sights given the prospect of it losing business in Europe, which has been spooked into considering how to secure its energy needs elsewhere in future, has rather strengthened Beijing’s negotiating hand.

from Global Investing:

Discovering Pyongyang’s view with a North Korean diplomat

Last week I went to a very unique session on North Korea which featured a rare appearance of a North Korean diplomat, at London-based policy institute Chatham House.

A wide range of topics -- from North-South relations, human rights, a potential nuclear test to a new generation of young diplomats -- were discussed, but  under the so-called Chatham House rules (meaning I cannot reveal who said what).

from Breakingviews:

Chinese real estate is in real trouble

By John Foley

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

China’s property market is built on a vicious triangle. There are three ways the pressures building in the real estate industry could show: shrinking investment, disappearing funding for developers, and lower prices. Though they’re all related, the effects and remedies are different.

from MacroScope:

Putin desperately seeking gas deal

Ukraine seems to be in something of a holding pattern before Sunday’s election though the question of how those polls can be securely conducted in parts of the country where pro-Russian rebels want to secede remains a very live one.

We reported yesterday from Donetsk where officials working to prepare for the May 25 presidential poll described intimidation and threats from separatists which prompted them to shut down their office. The interior minister in Kiev has said it would be impossible to hold “normal elections” in the regions of Donetsk and Luhansk which are home to nearly 25 percent of the electorate.

from Breakingviews:

Alibaba tries out role of the noble monopolist

By Ethan Bilby

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

Alibaba is trying out a new role: the noble monopolist. With an apparent 84 percent share of online consumer goods spending, it effectively owns the country’s Internet shoppers. Its payment affiliate is the biggest game in town. Both are attractions for its upcoming initial public offering. Alibaba’s long-term challenge is to keep showing that dominance helps the market rather than restricts it.

from MacroScope:

Why EU elections can matter

Some interesting action over the weekend: in a foretaste of this week’s EU elections, Greece's leftist, anti-bailout Syriza party performed strongly in the first round of local elections on Sunday, capitalizing on voter anger at ongoing government austerity policies.

If it did even better in the EU polls it could threaten the ruling coalition and tip Greece back into turmoil just as there are signs that it has turned the corner.

from The Great Debate:

Fires in Vietnam could ultimately burn Beijing

vietnam

The spilling of blood and burning of factories by anti-Chinese rioters sweeping across Vietnam reinforces Beijing’s message to other countries claiming territory in the South China Sea: resistance is costly and ultimately futile.

But a region in which anti-Chinese sentiment grows and where sovereignty disputes disrupt trade and economic growth will burn Beijing as well. Over the long term, a commitment to peaceful dispute resolution in accordance with international law, including some concessions on historic claims, would serve China better than its current path.

from Photographers' Blog:

China’s sea burials

Shanghai, China

By Carlos Barria

Before Li Zhenxuan died at the age of 101, the former chief officer of a riverboat told his son he wanted to be buried at sea with his mother, who passed away in 1965, and his wife, who died in 1995.

REUTERS/Carlos Barria

On a rainy Saturday this month, his son released three bags of ashes into the wind and sea from a boat near the mouth of the Yangtze River, and Li's final wish was granted. Faced with a growing population, soaring property prices and increasingly scarce land resources, the Chinese government has been trying for years to convince more people to break with tradition and bury loved ones at sea, like Li. The practice has been slow to catch on. Many older Chinese oppose cremation and prefer to be buried beside ancestors, according to tradition, ideally on a verdant hillside with the proper 'feng shui'.

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