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from Breakingviews:

Alibaba deal spree turns from romance to thriller

By John Foley 

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

Alibaba’s investment story has turned from romance to thriller. Its Hong Kong movie-making affiliate has uncovered “possibly non-compliant” accounting just four months after the Chinese e-commerce giant bought a 60 percent stake. It’s not clear whether Alibaba’s controls were flawed – but it certainly raises questions about the value of the company’s recent investment binge.

The stake in ChinaVision, as the company was previously known, is just one of a string of recent deals. In total, Alibaba and its affiliates have spent $7.5 billion on acquisitions and investments this year, according to figures compiled by Reuters. While the company has made light of its deal-making processes in the past – founder Jack Ma supposedly agreed to buy a stake in a soccer team after a drinking session - the ChinaVision deal was approved by the board following due diligence by an outside accounting firm, according to people familiar with the situation.

Still, it’s a blow to the idea that Ma always deserves the benefit of the doubt. Like many of Alibaba’s investments, the logic of buying a film studio was fuzzy for a company whose main business is matching buyers and sellers of goods online. Alibaba did little to explain. That didn’t stop investors from rushing to ride on the company’s coat-tails. Before the shares were halted, the renamed Alibaba Pictures had a market capitalisation of HK$34 billion ($4.4 billion), more than triple the valuation implied by Alibaba’s investment.

from Breakingviews:

Asia’s solid exterior hides internal weakness

By Andy Mukherjee 

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

Asian economies are becoming more resilient externally, but sputtering economic growth is weakening them from within.

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.

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.

from Breakingviews:

Private equity’s bad habit: Asian minority stakes

By Una Galani

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

Private equity firms have developed a bad habit in Asia. They are investing record amounts in minority stakes in listed companies. Investors dislike such deals because they can buy the shares themselves. History also suggests that giving up control is fraught with risks.

from Breakingviews:

China’s Hong Kong experiment faces biggest trial

By Peter Thal Larsen

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

China’s experiment with Hong Kong is facing its biggest trial. The former British colony has mostly thrived in the 17 years since it was handed back to the People’s Republic. But a planned “Occupy Central” democracy protest is about to test Hong Kong’s openness – and China’s patience.

from Photographers' Blog:

The bun myth

Cheung Chau, Hong Kong
By Bobby Yip

A baker poses with a bun with the Chinese characters "Ping An", meaning peaceful and safe, inside a bakery at Hong Kong's Cheung Chau island April 30, 2014, six days before the Bun Festival. Each bun is sold for HK$8 (US$1.02). The annual festival celebrates the islanders' deliverance from famine many centuries ago and is meant to placate ghosts and restless spirits.  REUTERS/Bobby Yip

Cheung Chau, or “Long Island”, with a population of around 30,000, is famous not only for its seafood and snacks, and as a small resort for local tourists, but most of all for its buns.

A couple walks along a beach at Hong Kong's Cheung Chau, or "Long Island", where the annual Bun Festival is held, April 28, 2014. REUTERS/Bobby Yip

The Bun Festival is the annual highlight of this former fishing village. Tens of thousands of visitors flock to attend the ritual, jamming the narrow streets of this quiet island.

from Breakingviews:

WH Group flop shows pitfalls of crowded IPOs

By Una Galani

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

WH Group’s flop shows the pitfalls of overcrowded initial public offerings. The Chinese pork producer hired a record 29 banks but still failed to sell its $1.3 billion listing to investors. That undermines the standard wisdom that more advisers mean less risk for issuers. For banks, it’s a reminder that they can share embarrassment as well as sought-after league table credit.

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.

from Breakingviews:

Hong Kong needs to defend shareholder democracy

By Una Galani and Peter Thal Larsen

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Hong Kong needs to make a stand for shareholder democracy. Alibaba’s decision to shift its giant stock market listing to the United States has sparked a debate about control of public companies in the former British colony. Hong Kong’s stock exchange, whose rules wouldn’t have permitted a plan to let Alibaba insiders nominate a majority of board directors, is preparing a public consultation on shareholder rights. But dumping the principle of “one share, one vote” would be a mistake.

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