Wei's Feed
Jul 27, 2012

BREAKINGVIEWS:Winner’s curse haunts banks in Asian block trades

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

By Wei Gu

HONG KONG, July 27 (Reuters Breakingviews) – As tumbleweeds
roll across the ghost town that has become Asia’s equity capital
markets, block trades have become a way to keep bankers busy.
Though they may not be big money makers, they can offer a quick
boost to league table rankings, particularly when IPO markets
are moribund. But as Carlyle’s (CG.O: Quote, Profile, Research) recent sale of a $720
million stake in China Pacific Insurance (2601.HK: Quote, Profile, Research) (601601.SS: Quote, Profile, Research)
suggests, they can also be something of a winner’s curse.

Jul 23, 2012

Can Citic avoid the investment bank buyer’s curse?

(Refiles with edit to byline)

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

By Rob Cox and Wei Gu

HONG KONG, July 23 (Reuters Breakingviews) – Can Citic
(600030.SS: Quote, Profile, Research) avoid the investment bank buyers’ curse? The Chinese
securities firm is paying $1.3 billion for Credit Agricole’s
(CAGR.PA: Quote, Profile, Research) CLSA broker business. Avoiding another
Dresdner/Wasserstein, Nomura/Lehman or Credit Suisse/DLJ would
be hard for any bank – much less one controlled by the Beijing
government. Arm’s length management alone is unlikely to make
this deal different.

Jul 19, 2012
via Breakingviews

Chinese MBO boomlet may take necessary breather

Photo

By Wei Gu

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

Chinese management buyouts may fizzle on Wall Street. A regulatory probe, short-seller allegations, and a profit warning sliced 60 percent off New Oriental Education in the past two days. Though depressed stocks may make it cheaper for U.S.-listed Chinese companies to take themselves private, a spike in financial – and perhaps legal – costs may halt the buyout trend.

Jul 18, 2012
via Breakingviews

China investors get wise to a new four-letter word

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By Wei Gu

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

China investors have a new four-letter word to decry. Really it’s an acronym: VIEs, for “variable interest entities.” These are the structures used by nearly half of all Chinese firms listed on the Nasdaq to get around restrictions at home. A new Securities and Exchange Commission probe of New Oriental Education may sound their death knell. In the end, that’s probably best for investors – and for China. 

Jul 16, 2012
via Breakingviews

Investment banks’ Asian love affair cools rapidly

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By Wei Gu and Rob Cox

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

After the financial crisis, the investment banking mantra became “Shanghai, Mumbai, Dubai or goodbye.” While the rest of the world was falling apart, the countries stretching from Saudi Arabia to India, Southeast Asia and China were growing, and could pick up some slack. Or so the thinking went. But the swingeing decline in the Asian equities business – the most expensive pillar of Wall Street’s expansion – suggests this was a fallacy. A retreat now looks inevitable.

Jul 12, 2012
via Breakingviews

Wen’s stimulus medicine may not be best for China

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By Wei Gu

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

China’s economy is being driven by politics and timing. Premier Wen Jiabao said on July 10 that investment remained key to spurring growth, suggesting the possibility of stimulating the economy, as China did in 2008. No one wants to end their reign with a hard landing. But pushing more investment would make things harder for Wen’s successors, who take over early next year.

Jul 12, 2012

Shoes and drinks are canaries of Chinese slowdown

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

By Wei Gu

HONG KONG, July 12 (Reuters Breakingviews) – Chinese
consumers were supposed to kick in when the country’s export
machine slowed down. But results from some mainland branded
goods groups – from drinks-maker Master Kong to sneaker-producer
DongXiang (3818.HK: Quote, Profile, Research) – suggest that’s not happening. It’s hard to
see how China’s economy will rebalance towards consumer-led
demand if even staples moulder on the shelves.

Jul 10, 2012
via Breakingviews

Greying China could be left in the red

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By Wei Gu

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

China is developing a rich country problem: old age. The number of Chinese aged 60 or over may more than double to 438 million between 2010 and 2050, according to the United Nations. That will dent China’s competiveness and worsen social strains. A higher retirement age is one idea proposed by the country’s State Council to counter a huge pension fund shortfall. It’s not popular, but there may be little choice.

Jul 4, 2012
via Breakingviews

Chinese IP awareness, sown by West, bruises Apple

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By Wei Gu

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

Apple just got gently bruised in China. The U.S. gadget-making giant can easily afford the settlement it has agreed to use the iPad name in China. And a new lawsuit over Snow Leopard poses little threat. Still, the Middle Kingdom is increasingly alert to such things as trademarks and patents. Western multinationals wanted that, but Apple’s experience shows it may increasingly cut both ways.

Jun 28, 2012

Breakingviews-Mission creep may harm China Development Bank

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

By Wei Gu

HONG KONG, June 28 (Reuters Breakingviews) – Beijing’s top
policy bank is spreading the love. China Development Bank is
wielding its $1 trillion balance sheet not just for basic
infrastructure in China, but as far from its roots as housing in
California and e-commerce firm Alibaba 1688.HK at home.