Una's Feed
Jan 30, 2015

Modi market mania faces test in $3.7 bln coal sale

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

By Una Galani

HONG KONG, Jan 30 (Reuters Breakingviews) – The government
is selling a 10 percent stake in the lumbering monopoly to meet
its deficit target. A pledge to ramp up domestic production
makes it easier to lure buyers. Still, investor enthusiasm for
Coal India shares will set the tone for a big pipeline of chunky
deals.

Jan 21, 2015
via Breakingviews

Asian conglomerates lose plot in $10bln CITIC deal

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By Una Galani

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

It’s back-to-front dealmaking at its best. Two Asian conglomerates are jointly spending $10.4 billion on a 20.6 percent stake in their largest Chinese counterpart. Only then will Japanese trading house Itochu Corp, Thai tycoon Dhanin Chearavanont and China’s CITIC Limited decide how they can work together to create value. The unlikely alliance helps state-controlled CITIC tick another “reform” box while actually giving up very little.

Jan 12, 2015
via Breakingviews

Cheap oil lubricates Li Ka-shing’s corporate rejig

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By Una Galani

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

Cheap oil could be vital to Li Ka-shing keeping control of his empire. Asia’s richest man is selling a 6 percent stake in Husky Energy to his holding company as part of a broader shake-up. The move is vital to maintaining Li’s grip on his telecom, retail and property businesses. The recent fall in the oil price makes it harder for shareholders to object.

Jan 12, 2015
via Breakingviews

Li Ka-shing converts to shareholder value religion

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By Una Galani

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

Asia’s richest man has embraced a new faith. Li Ka-shing is splitting his empire in two, separating his property assets which are mostly in Hong Kong and China from the rest of the global ports-to-telecom-to-retail conglomerate. The rejig should help to shrink the group’s persistent stock market discount, allowing Li to leverage up the real estate business, and pay higher dividends. It’s a long-overdue acknowledgement that there is value to unlock.

Jan 6, 2015
via Breakingviews

AirAsia’s minority structure clouds crash impact

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By Una Galani

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

AirAsia is sharing the pain of its minority investments. The Malaysian budget carrier owns just 49 percent of the Indonesian unit that was struck by tragedy when one of its planes crashed into the Java Sea on Dec. 28. AirAsia shares have since lost more than 15 percent of their value. It’s a reminder that the group’s particular business model can’t entirely contain the financial pain.

Dec 31, 2014
via Breakingviews

China rail merger reveals topsy-turvy reform logic

By Una Galani

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

China is re-creating a domestic rail monopoly to improve its competitiveness abroad. Combining the country’s two largest train makers looks at odds with President Xi Jinping’s promise that market forces will play a more decisive role in The People’s Republic. But the new giant should be able to ratchet up pressure on foreign rivals.

Dec 23, 2014

Breakingviews: Kim Jong Un could succeed where Dan Loeb failed

By Una Galani

HONG KONG (Reuters Breakingviews) – Though the pay may be
better, it would be far-fetched to suggest that Kim Jong Un is
transforming from reclusive leader to activist shareholder. Yet
the cyberattack North Korea allegedly threw at Sony Pictures
could have the same effect. The hacking of the Hollywood studio
and its subsequent response put the question of whether the
Japanese group should spin off its entertainment unit back on
the front burner.

After many profit warnings and deep apologetic bows,
Sony Chief Executive Kazuo Hirai was beginning to win
investor support for his restructuring efforts. Having seen off
hedge fund manager Dan Loeb’s calls for a spinoff of Sony’s
entertainment properties, Hirai oversaw the sale of Sony’s PC
division and the downsizing of its ambitions in smartphones.
Even with the hacking scandal, Sony shares are up 35 percent
this year – nicely outperforming the benchmark Topix.

Dec 19, 2014
via Breakingviews

Goodbye tech conglomerates, hello “ecosystems”

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By Una Galani

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

Short on strategy? Maybe you need an “ecosystem”. Technology giants are using that word to justify building sprawling internet-based conglomerates out of a mish-mash of assets, often with few obvious synergies. Asian companies like China’s Alibaba and Japan’s Softbank are among the most avid fans of this unhelpful term.

Dec 17, 2014
via Breakingviews

SpiceJet rescue is no fix for India aviation woes

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By Una Galani

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

SpiceJet’s woes are all too familiar. India is cajoling banks to lend to the country’s second largest single-brand carrier when the debt-ridden airline needs more equity. The government’s hope is to save jobs and prevent a repeat of the embarrassing high-profile failure of Kingfisher Airlines which was grounded in 2012. Even if the rescue works, exorbitant fuel taxes and the lack of a bankruptcy law will keep the industry stuck in an air pocket.

Dec 15, 2014

Breakingviews: BAIC Motor IPO offers slow road to China luxury

By Una Galani

HONG KONG (Reuters Breakingviews) – BAIC Motor’s initial
public offering is priced for cautious drivers. The Chinese
automaker plans to sell shares in Hong Kong at HK$8.90 ($1.15),
giving a relatively unracy market capitalisation of $8.6
billion. That reflects worries about the position that BAIC
occupies within China’s decelerating car market and a healthy
degree of reservation over its premium ambitions.

The Beijing-based company has a three-speed business model.
Its own-brand low-cost cars are not profitable. Earnings rely on
two joint ventures with foreign partners. A partnership with
South Korea’s Hyundai Motor producing mass-market
cars is the main cash engine, contributing around 5.4 billion
yuan ($873 million) to the bottom line in 2013. A joint venture
with Germany’s Daimler to sell the premium
Mercedes-Benz brand contributed less than 800 million yuan.

    • About Una

      "Una Galani is Asia Corporate Finance Columnist of Reuters Breakingviews, based in Hong Kong. She spent three years in Dubai covering the region’s economies in the immediate aftermath of the Arab Spring. Previously, Una wrote on capital markets, mergers and acquisitions, and telecoms across Europe from London. She was commended in the category of Young Financial Journalist at the Harold Wincott Awards for 2009 after joining Breakingviews in 2006. Una read English Literature at Oxford. Follow Una on Twitter @ugalani"
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