Breakingviews

Coal rally may already be out of steam

September 22, 2016

The steel-making fuel is likely to give producers like BHP Billiton and Anglo American unexpected earnings boosts but there are few reasons to believe in a lasting rally. Weak Chinese metals demand and a potential revival in domestic supply could make gains fragile for investors.

China gets steelier about debt restructuring

September 22, 2016

Metals trader Sinosteel has agreed a $4 bln workout. The deal is a fudge, but spreads the pain more widely than expected. Meanwhile, a smaller miner has been allowed to fail. Both episodes suggest China is getting a bit tougher about debt problems in moribund sectors.

China postal bank aptly fails to push envelope

September 21, 2016

Postal Savings Bank is raising $7.4 bln after pricing shares in its IPO near the bottom of the range. The implied worth of the lender's equity is 0.93 times its forward book value, in line with peers. Higher costs and loan concentration means it is lucky to secure that.

China’s startups have few good options left

September 20, 2016

A slowdown in venture capital is squeezing smaller tech hopefuls. Many have flocked to the "New Third Board" but it's hard to raise new equity on this moribund over-the-counter market. Some cash-strapped groups may sell out to larger rivals, or cut costs and hope for the best.

How Hinkley delivers a bad deal for everyone

September 15, 2016

The approval of Britain’s new nuclear power plant puts politics ahead of sense. Consumers could end up paying 15 bln pounds in today’s money. New ownership tests erode the country’s reputation for openness. Brexit has undermined Britain’s bargaining power.

China’s car scam shows best and worst of subsidies

September 15, 2016

Lavish grants for electric vehicles nurtured new technology and a massive market. The largesse came at a price, though, with many millions of dollars lost to scammers faking sales to claim cash. There may yet be a happy ending for home-grown heroes like BYD.

Postal bank’s $8 bln IPO scrapes through the door

September 13, 2016

Postal Savings Bank of China is roughly worth its trailing book value at the middle of the price range. SOE listings can't pass at a discount. But that's where rivals with higher returns trade. The bank's safer lending profile, and anchor investors, should stop logic taking hold.

China tosses trading partners some import scraps

September 9, 2016

In August, for the first time in 22 months, imports turned positive. But most foreign exporters and China bashers can keep the bubbly on ice. The data's timing has a whiff of diplomacy. Beijing will keep its aggressive trade policies in place so long as they serve other goals.

Yum’s new China backers add spice at a price

September 2, 2016

The KFC owner is selling a slug of its China unit to Alibaba's mobile-payments arm and a firm run by former Goldman Sachs partner Fred Hu. Together, they bring tech nous and connections. It's a better deal than usual for cornerstone investors, but may pay off for Yum's spinoff.

China is wrong venue for an SDR revival

September 1, 2016

Beijing wants to revive interest in Special Drawing Rights, the IMF quasi-currency it is about to join. The World Bank will sell $2 bln of SDR debt in China to help. Global investors badly need an alternative to the dollar but China's rickety bond market is a poor place to start.