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☆ Alibaba exit is first remedy for Paytm’s woes
▼ + stars: | 2023-02-13 | by ( ) www.reuters.com time to read: +1 min

MUMBAI, Feb 13 (Reuters Breakingviews) - Alibaba’s (9988.HK), exit will be a relief for India’s Paytm (PAYT.NS). The move makes sense for Alibaba, though Paytm’s other Chinese backer, Ant, may find it harder to cash out. Paytm’s languishing stock is up over 27% in four days following the better-than-expected quarterly numbers. That allowed Alibaba’s Singapore arm to exit the company at 643 rupees per share, a decent 10% higher than its average purchase price. That implies Paytm’s stock still has a steep climb before the Chinese payments group may be willing to sell.

☆ MSCI’s Adani cut signals fat tail risks for India
▼ + stars: | 2023-02-10 | by ( Shritama Bose | ) www.reuters.com time to read: +5 min

Hindenburg founder Nathan Anderson sees MSCI's move as a validation of his group’s findings of “stock parking” by Adani. The Securities and Exchange Board of India, headed by former banker Madhabi Puri Buch, acknowledged unusual price movements this month, but without naming the Adani group. But the longer the controversy drags on, there will be a fat tail risk for Adani and all his stakeholders. CONTEXT NEWSGlobal index provider MSCI on Feb. 9 cut its determined free floats for four Adani companies. It reduced those of Adani Enterprises, Adani Total Gas, Adani Transmission and ACC, and said any resulting changes will be implemented at the close of Feb. 28.

☆ Chinese firms face embarrassment of listing riches
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +2 min

HONG KONG, Feb 10 (Reuters Breakingviews) - Global appetite for Chinese stocks is returning. Sensor-maker Hesai shares popped nearly 11% in what is the biggest initial public offering from the People’s Republic in New York since 2021. The country's sudden reopening has boosted economic activity, and regulators are prioritising growth over cracking down on private firms. Hedge funds have increased their exposure to Chinese equities back to 2020 levels, Goldman Sachs data shows. A steady stream of firms are mulling Hong Kong listings too.

But unlike ICBC and its peers, Ant neither took deposits, nor piled risky loans onto its balance sheet. Free from the red tape that binds regular banks, the loans facilitated by Ant ballooned. Digital offerings accounted for half of overall consumer loans in China, Fitch Ratings calculated in 2021. Ant is set to become a licensed financial holding company, putting it under the close watch of China's main banking regulator. Beijing wants Chinese consumers to consume, so is likely to indulge controlled growth of consumer credit.

☆ Gautam Adani’s woes were in banks' plain sight
▼ + stars: | 2023-02-08 | by ( Una Galani | ) www.reuters.com time to read: +9 min

MUMBAI, Feb 8 (Reuters Breakingviews) - Gautam Adani’s recent woes have vindicated persistent doubts in India about the tycoon’s rise. The Indian group dismisses those claims as a “malicious combination of selective misinformation and stale, baseless and discredited allegations”. By contrast, other big Indian groups like Mukesh Ambani’s Reliance Industries (DBKGn.DE) and those carrying the Tata name are more popular with institutional investors. Fee-hungry international banks were much less picky. Deutsche, Barclays and StanChart pocketed $57 million of the $260 million of investment banking revenue generated by the Adani group since Dealogic records began.

☆ India’s Vodafone rescue has strings attached
▼ + stars: | 2023-02-06 | by ( ) www.reuters.com time to read: +2 min

MUMBAI, Feb 6 (Reuters Breakingviews) - New Delhi has finally come good on its promise to convert Vodafone Idea’s (VODA.NS) dues worth $2 billion into an equity stake. The state’s move, which dialed up a 10% gain in Vodafone Idea’s stock, could ease the company’s pressures elsewhere. A recently extended repayment schedule for $194 million of cash owed to American Tower (AMT.N) should bolster its chances, too. India’s Telecommunications Minister Ashwini Vaishnaw said on Friday that concomitant with the swap is a “firm commitment” of fresh capital from the Aditya Birla group, Vodafone Idea’s second-largest shareholder. For a group that has often expressed a wish to exit the telecom business, the bailout must feel like a Pyrrhic victory.

☆ Gold miner unearths risky M&A seam
▼ + stars: | 2023-02-06 | by ( Antony Currie | ) www.reuters.com time to read: +3 min

That’s precisely what Newmont (NEM.N) boss Tom Palmer has just done, offering $17 billion in stock for Australian gold excavator Newcrest Mining (NCM.AX). At present Newmont is offering a 22% premium to the target’s undisturbed share price, after Newcrest rejected an earlier 17% boost. What Canada’s Barrick Gold (ABX.TO) does in response is the main question. It is the world’s largest gold miner, which at $40 billion sports a market capitalisation 25% higher than Barrick’s. Agnico Eagle Mines (AEM.TO), the $24 billion third-largest miner of the ore, may want to dig in, too.

☆ U.S.-China rewarming trade is half-full of hot air
▼ + stars: | 2023-02-03 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

Enter a literal ball of hot air in the form of a Chinese spy balloon that the United States military is tracking in its home skies. The balloon’s brazen appearance augurs ill for Secretary of State Antony Blinken’s expected visit to Beijing next week. However, it is important to put the balloon in the context of Beijing’s habitual good cop, bad cop negotiating routine. In financial terms, Beijing still largely has its good-cop hat on. U.S. investors may fret about Chinese eyes in the sky, but in financial terms they have more to fear from the flaming gas jets in their own legislature.

☆ Breakingviews: Adani’s share sale U-turn spares only some blushes
▼ + stars: | 2023-02-02 | by ( Una Galani | ) www.reuters.com time to read: +4 min

HONG KONG, Feb 2 (Reuters Breakingviews) - Markets have given Gautam Adani a big bloody nose, and his backers a partial reprieve. The tycoon’s decision on Wednesday to pull the $2.4 billion share sale at his flagship Adani Enterprises (ADEL.NS) was all but forced after a 28% plunge in the company’s share price the day after it closed the books. That danger was magnified on Wednesday with India’s regulator looking into possible irregularities around the share sale, Reuters reported exclusively citing a source with direct knowledge of the matter. Less than one quarter was due to pay down borrowings at the issuer and its unlisted subsidiaries, including Adani Airport and Adani Road. loadingCONTEXT NEWSAdani Enterprises on Feb. 1 said it is withdrawing its $2.4 billion share sale due to the “unprecedented situation and the current market volatility”.

☆ Gautam Adani’s next hurdles may be harder to clear
▼ + stars: | 2023-02-01 | by ( Una Galani | ) www.reuters.com time to read: +4 min

HONG KONG, Feb 1 (Reuters Breakingviews) - It helps to have friendly investors and rich families on hand when finalising a tricky share sale. The feat will be hard to repeat though, while the Indian tycoon’s next hurdles might be harder to clear. Investor interest in Adani Enterprises (ADEL.NS) was underwhelming. Shares in $32 billion Adani Total Gas (ADAG.NS) have nearly halved since Hindenburg published its critical report. loadingCONTEXT NEWSThe $2.4 billion share sale by Adani Enterprises was fully subscribed on Jan. 31, data released by the Indian stock exchange showed.

Morgan Stanley economists forecast its stock market will be the world’s third largest before the end of 2030. For those who passively track stock market indexes, the controversy engulfing Adani, briefly the world’s third richest man, may act as a deterrent from an already expensive market. The newish chair of India’s securities regulator, Madhabi Puri Buch, has already wielded a stick at credit rating agencies to instil better market discipline. In the meantime, the turmoil is a reminder to investors of the danger of investing blindly in emerging markets. Stocks look increasingly expensive compared to emerging marketsReuters GraphicsFollow @ugalani and @ShritamaBose on TwitterloadingloadingCONTEXT NEWSShares of the Adani group companies have lost $65 billion since Jan. 25 after U.S. short-seller Hindenburg Research published a research note on the group.

☆ High inflation isn’t going away
▼ + stars: | 2023-01-31 | by ( ) www.reuters.com time to read: +2 min

The report, released on Tuesday, indicates that global inflation has peaked but policymakers will still have to fight harder to vanquish it. Worldwide growth in consumer prices will fall from an annual average of 8.8% in 2022 to 6.6% in 2023 and 4.3% next year, the IMF reckons. A drop in energy costs and weaker demand – hammered by rising interest rates - will drive much of that decline. Even in advanced economies, where inflation is set to fall from 7.3% in 2022 to 4.6% this year, the IMF reckons prices will still rise by 2.6% in 2024. That suggests interest rates will stay high even after the U.S. Federal Reserve and European Central Bank stop hiking.

HONG KONG/MUMBAI, Jan 30 (Reuters Breakingviews) - Gautam Adani’s financing options are narrowing fast. That leaves it dependent on a safety net provided by Indian banks. Those concerns exploded after Hindenburg Research last week declared the Indian group was making extensive use of tax havens and “pulling the largest con in corporate history” – allegations Adani dismissed as “misinformation” and “stale, baseless and discredited”. Lending more to the group would protect the capital that banks already have at risk in projects under construction. Shares of Gautam Adani’s listed companies have lost a combined $48 billion in market capitalisation since Jan. 25.

HONG KONG, Jan 27 (Reuters Breakingviews) - China’s first big vacation of 2023 offers shallow relief to investors. Passenger car sales dropped 21% from the same festive period last year, per Nomura analysts, and real estate keeps plunging. Central bankers terrified that China’s reopening will fuel more global inflation will be relieved. Chinese consumers enjoyed their holiday but there was little sign of dramatic “revenge consumption.” Scarred consumers have too many reasons to avoid splurging for the foreseeable future. The opinions expressed are her own)Follow @ywchen1 on TwitterloadingCONTEXT NEWSMainland China’s Lunar New Year holiday runs from Jan. 21 to Jan. 27 in 2023.

☆ Adani’s buy now, pay later fundraise could sting
▼ + stars: | 2023-01-26 | by ( Una Galani | ) www.reuters.com time to read: +4 min

HONG KONG, Jan 26 (Reuters Breakingviews) - Gautam Adani is on a mission to win public acceptance for his eponymous group. The first stage of a $2.4 billion stock sale by his flagship Adani Enterprises (ADEL.NS) entity has won over anchor investors, including the well-regarded Abu Dhabi Investment Authority. They are picking up roughly $734 million of stock in India’s largest follow-on issue of new shares by a private sector company. But those of other Adani group companies including Adani Transmission (ADAI.NS) and some U.S. dollar bonds at Adani Green Energy (ADNA.NS) and Adani Ports (APSE.NS) sold off sharply. For Adani investors, buy now, pay later could take on an awkward new meaning.

☆ California floods underscore rising climate costs: podcast
▼ + stars: | 2023-01-24 | by ( Ben Winck | ) www.reuters.com time to read: 1 min

WASHINGTON, Jan 24 (Reuters Breakingviews) - Catastrophic storms have devastated the Golden State’s economy and left more than $1 bln in damages. In this Exchange podcast, climatologist Adam Smith explains how global warming has made weather events more expensive, and what governments can do to protect against them. Listen to the podcastFollow @BenWinck on TwitterEditing by Thomas ShumOur Standards: The Thomson Reuters Trust Principles. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

HONG KONG, Jan 19 (Reuters Breakingviews) - Macau is bounding into the Year of the Rabbit. Meanwhile arrivals from China and Hong Kong reached roughly 40% of 2019 traffic as of Jan. 13, per Morgan Stanley. That is remarkable given the mainland and Macau only relaxed restrictions less than two weeks ago. Melco Resorts & Entertainment , MGM China (2282.HK), Sands China (1928.HK) and Wynn Macau (1128.HK) have seen their leverage ratios swell. Ultimately to rebalance borrowings, Macau needs returning visitors to spend as much – or more – as they did in the past.

☆ China’s demographic decline can be boon, not doom
▼ + stars: | 2023-01-18 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

Yet China’s demographic doom is not certain. It is hard to boost birth rates, but France and Scandinavia show it can be done. If last year’s population plunge inspires Beijing to smarten up policy, demographic stress need not augur economic decline. The birth rate was 6.77 per 1,000 people, down from 7.52 in 2021 and marking the lowest such reading on record. United Nations analysts project China's population will shrink by 109 million by 2050, more than triple the rate of their previous forecast in 2019.

☆ Alibaba’s pushy shareholder mistimes his moment
▼ + stars: | 2023-01-18 | by ( ) www.reuters.com time to read: +2 min

HONG KONG, Jan 18 (Reuters Breakingviews) - Ryan Cohen has been pressing Alibaba (9988.HK), for improvements since last August, per the Wall Street Journal. As the owner of an undisclosed stake, he wants the company to boast its share buybacks. It confirms Alibaba’s emerging status as a mature company: revenue growth is forecast to almost halve to 10% by 2025, per Refinitiv. Increasing share purchases as the storm settles, and as an obstacle in the company’s growth path clears, would be odd. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

HONG KONG, Jan 17 (Reuters Breakingviews) - The Chinese economy grew 3% in 2022, the government reported, beating forecasts but way below the official 5% target. The surprising lift is largely thanks to a rosier-than-expected fourth quarter, when the country took a ride on a pandemic-policy rollercoaster. As the contagious Omicron strain spread through cities, local officials’ first reaction was to tighten lockdowns, which suppressed consumption. That’s hardly enough to revive market confidence; Chinese equity indexes fell after the GDP report. The Chinese government had set the official annual GDP target at "around" 5.5% in March.

☆ Chip woes short-circuit Samsung's best laid plans
▼ + stars: | 2023-01-06 | by ( ) www.reuters.com time to read: +2 min

HONG KONG, Jan 6 (Reuters Breakingviews) - South Korea's Samsung Electronics (005930.KS) can only defy gravity for so long. The worse-than-expected earnings guidance throws cold water on the chipmaker's aggressive supply and capital expenditure spending plans laid out in October. Analysts at Citi reckon Samsung’s memory chip capex this year will be roughly $25 billion, more than 10% lower than their earlier forecast. Samsung's best laid plans are starting to go astray. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ India’s Vodafone stress test may have ugly results
▼ + stars: | 2023-01-06 | by ( Una Galani | ) www.reuters.com time to read: +4 min

Investors cheered, and many customers in its now-234 million-and shrinking subscriber base breathed a sigh of relief. Vodafone, meanwhile, is now calling on the banks for fresh loans, per the Economic Times. That may not have been sufficient, but there was no disclosure by the company stating that the swap was conditional on the existing owners’ financial commitment. India’s politicians are careful to avoid situations where they might be accused of being too generous to foreign multinationals. With so much stress, though, other creditors might find a reason to pull the rug from under the company’s feet sooner.

HONG KONG, Jan 5 (Reuters Breakingviews) - Western Digital (WDC.O) faces a daunting M&A challenge. Both outfits specialise in a type of memory chip called NAND flash, which is used in smartphones, computers and data centre servers. Yet even if the logic for a combination looks more compelling against this backdrop, the M&A hurdles Western Digital faced in 2021 are even more challenging today. The union between Western Digital and Kioxia will be a long slog, but worth it. Shares of Western Digital rose 7.7% to $35.63 during after-hours trading in New York on Jan. 4.

☆ Hong Kong’s hamsters sound shrill warning
▼ + stars: | 2023-01-05 | by ( ) www.reuters.com time to read: +2 min

HONG KONG, Jan 5 (Reuters Breakingviews) - Almost a year to the day since Hong Kong culled 2,000 hamsters to combat Covid-19, the city is rescinding a ban on importing the creatures for sale, Bloomberg reported on Thursday. The rodents’ return is a small but welcome landmark in its gradual reopening. Imported hamsters must still test negative for the virus before they can be sold. As Hong Kong prepares to start reopening the mainland border next week, the city needs to cure lingering, illogical bureaucracy, which will hamper urgent efforts to heal the economy, and resurrect normal life. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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