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HONG KONG, May 3 (Reuters Breakingviews) - Chinese travellers are opening their suitcases again, but not their wallets. Domestic travel bookings during the holiday surged eightfold from a year earlier, surpassing pre-pandemic levels, according to online travel agency Trip.com (9961.HK). The return of Chinese holiday-goers should be a huge relief at home and abroad. Before the pandemic, domestic tourism contributed a whopping 11% of GDP and 10% of national employment, according to Fitch. The country's Big 3 carriers - Air China (601111.SS), China Southern (600029.SS), and China Eastern (600115.SS) - are grappling with high oil prices, a weak yuan and geopolitical tensions.

☆ The end of cheap credit could hurry Japanese M&A
▼ + stars: | 2023-05-02 | by ( ) www.reuters.com time to read: +2 min

Diversifying abroad looks attractive to many Japanese companies given weak home markets. The country's third-largest drugmaker by sales is paying a modest-looking 22% premium to Iveric's share price before the announcement. Analysts at Jefferies reckon those sales could top $85 million in its first year and peak at $2.4 billion annually by 2034. Regardless, even Warren Buffett has taken advantage of Japanese rates to funds deals inside Japan; domestic corporations looking abroad will as well. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ China’s Midea regains outbound deal appetite
▼ + stars: | 2023-05-02 | by ( ) www.reuters.com time to read: +2 min

HONG KONG, May 2 (Reuters Breakingviews) - Midea (000333.SZ), a $58 billion Chinese white goods champion, made waves in Europe in 2016 when it bought German robot maker Kuka for nearly $5 billion. Seven years later, the company is eyeing Sweden’s home appliance brand Electrolux (ELUXb.ST), a complementary asset currently worth around $7 billion including debt. A successful tilt could mark the beginning of a revival in outbound M&A by Chinese firms after offshore deals touched a historic low of $29 billion in 2022, per EY estimates. To close the Kuka acquisition, Midea offered a 36% price premium and generous guarantees including leaving management in place until 2023. Nevertheless, it seems likely that more cash-rich Chinese companies like Midea, seeking to hedge weak domestic demand with overseas customers, will gingerly test cross-border M&A markets this year.

HONG KONG, May 2 (Reuters Breakingviews) - Money flowing into the People's Republic is getting uncomfortably hot. Yet recent reversals in New York, Hong Kong and Shanghai suggest that is driven by fickle short-term funds – exactly what Beijing doesn’t want. Reuters Graphics Reuters GraphicsFollow @mak_robyn on TwitterCONTEXT NEWSChinese spirit maker ZJLD shares closed down 18% lower than their initial public offering price on their trading debut April 27. The KKR-backed company raised $676 million in what was the biggest offering in Hong Kong since October 2022. Separately, the Ontario Teachers' Pension Plan, Canada's third largest pension fund, closed down its China equity investment team based in Hong Kong, Reuters reported on April 25, citing sources.

REUTERS/Edgar SuSINGAPORE, April 27 (Reuters) - Vera Liu, a Singapore property agent, was panicking in the wee hours of Thursday morning after new property taxes saw two of her deals fall through. Policymakers are growing concerned that foreign investors increasingly see Singapore property as a hot asset class, squeezing out locals. Christine Sun, the senior vice president of research & analytics at OrangeTee & Tie, called it a "freezing measure" for foreign buyers. Shares of Singapore property companies fell on Thursday, with City Development (CTDM.SI) and UOL Group (UTOS.SI), which have large Singapore footprints, hit hardest. "There's little impact on the other 90%," said Mak, who has been analysing Singapore property for more than two decades.

☆ Kirin investors find vitamin deal hard to swallow
▼ + stars: | 2023-04-27 | by ( ) www.reuters.com time to read: +2 min

The $15 billion Japanese company is best known as a brewer, but sources more than half its top line from other businesses. Kirin, led by CEO Yoshinori Isozaki, also reckons the deal will be accretive to earnings per share in the first year. Yet investors immediately wiped some $450 million off the purchaser’s market value on Thursday, almost double the premium it agreed to pay Blackmores’ shareholders. Blackmores may yet show Kirin has adopted a better dealmaking regimen, but investors aren’t holding their breath. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ TPG’s funeral deal is stuck in awkward purgatory
▼ + stars: | 2023-04-24 | by ( ) www.reuters.com time to read: +2 min

MUMBAI, April 24 (Reuters Breakingviews) - TPG (TPG.O) is stuck between the mortal world and the afterlife with its dalliance with Australia’s funeral-services company InvoCare (IVC.AX). But the roughly 20% stake it picked up around the same time locks the pair into an awkward dance. InvoCare was open to better terms, and offered the suitor access to limited, non-public financial information. Following the collapse of Silicon Valley Bank in the United States, rising global worries about financial stability will make it harder to do deals. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ South Korea's chip dilemma gets sharper
▼ + stars: | 2023-04-24 | by ( ) www.reuters.com time to read: +2 min

China's security review of the $66 billion Micron is largely seen as retaliation against U.S. export controls on chipmaking technology. Yet Yoon has reason to do what America asks at the expense of South Korean companies. Bolstering the security alliance amid rising nuclear risks from North Korea will be on the top of his agenda; negotiating better terms for South Korean electric-car and chip investments into the United States will be another. As the chip war heats up, and threatens to widen, Seoul will find keeping its top two trading partners happy even tougher. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Beijing's retaliatory strategy against U.S. chip sanctions is a bigger worry. Taiwan Semiconductor Manufacturing has so far remained relatively unscathed since Washington stepped up sanctions to hobble China’s domestic semiconductor development. Second, even if Chinese companies account for just 11% of TSMC’s top line, its other customers are far more exposed to the People's Republic. How Beijing responds to American pressure will define the scope of TSMC’s recovery. In January, TSMC said its capital spending in 2023 would be between $32 billion and $36 billion, compared to $36.3 billion in 2022.

HONG KONG, April 17 (Reuters Breakingviews) - Hong Kong could use a shot of something. Yet compared to the $313 billion Shanghai-listed behemoth Kweichow Moutai (600519.SS), debutante ZJLD is a drop in the near-$100 billion baijiu industry: it logs less than 1% market share. At the top of the marketed price range, ZJLD could be worth $5.4 billion, or almost 24 times this year's forecast earnings, IFR reports. Revenue at the company, which will be the first baijiu distiller to list in Hong Kong, was up a healthy 15% last year, while its adjusted net profit margin topped 20%. For Hong Kong, consumer stocks will put the focus back onto classic risks.

With that out of the way, Zhang is cleared to focus on Alibaba's massive corporate overhaul unveiled last month. Current shareholders will be left with a holding company led by Zhang, plus Alibaba's cash-cow Chinese commerce business. After all, Alibaba's U.S. shares are down over 60% in the past two years, while the S&P 500 has stayed largely flat. The sales will eventually reduce SoftBank's stake in Alibaba to 3.8%. In 2022, SoftBank booked a gain of $34 billion by cutting its stake in Alibaba to 14.6% from 23.7%.

☆ Gold miner’s mega $20 bln deal is not quite over
▼ + stars: | 2023-04-11 | by ( ) www.reuters.com time to read: +2 min

The boss of $40 billion U.S.-based gold miner Newmont (NEM.N) has sweetened his bid for Australian rival Newcrest (NCM.AX) after the latter rejected its two prior approaches. The latest $19.5 billion offer looks shinier but still faces some challenges. Under the revised proposal, Newcrest shareholders will receive 0.4 of a Newmont share for each one they hold, plus up to $1.10 via a franked special dividend. Newcrest shares closed nearly 10% below the offer price on Tuesday. Newcrest shareholders, who will own 31% of the merged company, also need to approve the deal.

Thomson ReutersRobyn Mak joined Reuters Breakingviews in 2013. Previously, she was a Research Associate for the Global Policy Programs at the Asia Society in New York where she focused on US-Iran relations, US-Myanmar relations and sustainability issues in Asia. She has also worked as a researcher at the Carnegie Endowment for International Peace in Washington DC and interned at several consulting firms, including the Albright Stonebridge Group. She holds a masters degree in international economics and international relations from the Johns Hopkins School of Advanced International Studies and is a magna cum laude graduate of New York University.

HONG KONG, April 6 (Reuters Breakingviews) - Alibaba's (9988.HK) worth may be hiding in plain sight. The $260 billion Chinese group wants to split off faster-growing, money-losing bets like its cloud and logistics units. It accounted for 9% of Alibaba's top line in the nine months to December, nearly double five years ago. Zhang would do well to focus investor attention back onto Alibaba's commerce operations in China. That’s some 30% more than the company’s entire market value as of Wednesday.

☆ Google giggles at China tech’s shrinking act
▼ + stars: | 2023-03-31 | 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: +3 min

HONG KONG, March 31 (Reuters Breakingviews) - As an $18 trillion economy home to 1.4 billion people, China is a natural font of statistical superlatives. The country’s internet giants, however, are dwarfed by American colossi like the $1.3 trillion Google owner Alphabet (GOOGL.O). Access to cheap capital helped founders like Alibaba’s Jack Ma quickly diversify and build sprawling empires with global ambitions. Meanwhile, the top eight U.S. tech names, led by Apple (AAPL.O), Microsoft (MSFT.O) and Alphabet, are worth $8 trillion today. The American tech giants already generate three times more revenue and nearly five times more free cash flow than their aspirant Chinese challengers, Refinitiv Eikon data shows.

That should unlock value for weary shareholders, and please regulators and politicians keen to control strategic businesses. The restructuring will give each of Alibaba’s six businesses, which include its core commerce division, as well as cloud computing, games and logistics units, their own chief executive and board of directors. Investors promptly added nearly $23 billion, or 10%, to the New York-listed company’s market value, now at $250 billion, following Tuesday’s announcement. The $460 billion video-game giant also operates in sensitive areas like online media, cloud computing and mobile payments. Daniel Zhang will continue to serve as chairman and chief executive of Alibaba, which will follow a holding company management model, and concurrently serve as CEO of Cloud Intelligence.

HONG KONG, March 28 (Reuters Breakingviews) - In the biblical parable of the prodigal son, a repentant wastrel returns home to a forgiving and beneficent father. In China, Alibaba (9988.HK) founder Jack Ma's homecoming and rehabilitation appears to be part of an official campaign to revive flagging private sector investment. However, if officials believe the mere sight of Ma in public will revive business confidence, that hope has a whiff of desperation. Ma the prodigal entrepreneur has returned, but perhaps not for long. Shares of Alibaba rallied as much as 4% in Hong Kong following the SCMP report before closing flat at HK$85.25 on March 27.

HONG KONG, March 23 (Reuters Breakingviews) - Tencent (0700.HK) is sounding more like its normal self again. The combination of regulatory respite, a post-lockdown consumption bounce plus cost cuts have put the company in a sweet spot for 2023. Revenue in the three months to December inched up 0.5% from a year earlier, to $21 billion, reversing year-on-year declines from the previous two quarters. With 2022 firmly behind it, Tencent can put a spring back in its step. Shares of Tencent rose 4.7% to HK$364.00 during early morning trading on March 23.

☆ 18 countries sent sharpshooters to a US military base in Germany to see who has the best sniper team in Europe
▼ + stars: | 2023-03-22 | by ( Stavros Atlamazoglou | ) www.businessinsider.com time to read: +6 min

The 2022 version of the European Best Sniper Team Competition was one of the largest ever. The European Best Sniper Team CompetitionEstonian troops in a replica of a downed UH-60 Black Hawk helicopter during the European Best Sniper Team Competition on August 6. An Italian sniper team in a replica of a downed helicopter during the European Best Sniper Team Competition on August 6. The winnersCompetitors in the "1917" event during the European Best Sniper Team Competition on August 6. Snipers and modern warfareA Finnish Army sniper team at the European Best Sniper Team Competition on August 7.

Separately, in a televised interview on Wednesday, Erdogan downplayed the significance of the meeting with Simsek, saying such meetings were ordinary. A senior government official told Reuters the AKP was somewhat divided with some members opposed to Simsek's return, and described the outcome of the Erdogan meeting as "undesirable". The party may now need to revise its economic platform ahead of the election campaign, he added. The AKP declined to comment on whether it was revising its economic strategy ahead of the vote. Two recent polls by MAK and Turkiye Raporu show the opposition presidential challenger Kemal Kilicdaroglu between 4 and 9 percentage points ahead of Erdogan.

Concerns that Chinese investors are buying overseas to make a quick profit at home are valid. Since last year, 11 Chinese companies have raised a combined $3.6 billion by selling GDRs on the Six Swiss Exchange, data from Dealogic show. Savvy punters with access to foreign funds can therefore make a quick and relatively risk-free profit by shorting the Chinese stock and buying the discounted GDRs. This helps explain why Swiss shares of Chinese companies barely trade. Since the launch of a China-Swiss stock scheme in 2022, 11 Chinese companies have raised a combined $3.6 billion, according to data from Dealogic.

☆ China central bank punts its succession problem
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +2 min

That may be because Zhu Hexin, his mooted successor, is known mostly for his stint heading state-owned financial conglomerate CITIC – not a household name outside China - has no detectable international experience. In contrast, Yi is a respected known quantity for domestic and international investors alike, comfortable parleying with global institutions like the World Bank and IMF. Beijing might be keeping Yi for the painful parts of the reorganisation – including massive pay cuts – before retiring him. The so-called sea turtles – Chinese people with overseas market experience and foreign language skills – have been migrating out of government for years. 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, March 9 (Reuters Breakingviews) - European financial centres are rolling out the red carpet for Chinese companies. Its free-float market capitalisation of $1.9 trillion is just a tenth of the New York Stock Exchange, January data from the World Federation of Exchanges show. Yet as tensions between Washington and Beijing rise and Chinese companies in New York face the threat of delisting, traditionally neutral Zurich has become an attractive alternative. That removes the risk that overseas regulators will demand access to mainland companies’ books - the source of a lengthy spat between the U.S. Public Company Accounting Oversight Board and Beijing. Deutsche Börse (DB1Gn.DE), which operates Frankfurt’s stock exchange, is technically ready to launch the China-Germany Stock Connect, board representative Niels Tomm said in November.

[1/5] Turkish President Tayyip Erdogan meets with people in the aftermath of a deadly earthquake in Kahramanmaras, Turkey February 8, 2023. "The earthquake definitely changes our opinion because the first responders and tents were very late to arrive," he said. How big a challenge Erdogan faces is difficult to determine, given the lack of polling in the region. One party official said they would "re-direct" residents' focus to efforts to rebuild and stress no one but Erdogan could do this quickly. The region voted 65% or more for the AKP and its nationalist ally the MHP in the last election in 2018.

The usually sleepy Ministry of Science and Technology will be tasked to help lead the country's efforts to reduce dependence on Western suppliers. Meanwhile, creating a National Data Bureau should streamline the myriad of regulations spanning cybersecurity, personal privacy and information transfer. The benefits of upgrading the science, technology and patent ministries are less clear. And despite China being the world's most prolific patent filer, 90% are low-value "trash", estimated one Chinese official in 2019. Other proposals from the State Council include creating a National Data Bureau to coordinate sharing and developing the country's data resources.

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