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☆ Toshiba gives shareholder management masterclass
▼ + stars: | 2023-06-09 | by ( Una Galani | ) www.reuters.com time to read: +3 min

Its limited visibility on the value of the memory-chip specialist was one reason it cited for its earlier restraint. Follow @ugalani on TwitterCONTEXT NEWSToshiba said on June 8 that its board has decided to recommend shareholders accept a tender offer from a group led by Japan Industrial Partners. The tender offer is expected to be launched some time from late July. Among other factors, it cited limited visibility into the value of chipmaker Kioxia, of which Toshiba owns around 40%. In recommending the offer, Toshiba noted the book value of Kioxia’s shares had fallen since its March announcement.

Persons: Paul Singer’s Elliott, Daniel Loeb’s, Jerry Black, Antony Currie, Katrina Hamlin Organizations: Reuters, Toshiba, Japan Industrial Partners, Paul Singer’s Elliott Management, Farallon Capital, Thomson Locations: MUMBAI, Kioxia, Japan

☆ Private equity hurtles towards hard Asia reset
▼ + stars: | 2023-06-07 | by ( Una Galani | ) www.reuters.com time to read: +4 min

SINGAPORE, June 7 (Reuters Breakingviews) - Sequoia’s decision to carve out its China business formalises a push for a hard reset in Asia that private equity firms have until now largely been grappling with behind the scenes. These country-agnostic funds accounted for just over half the money raised in 2022 in the region, a 22-year high. Granted, these South and Southeast Asia markets are small at present compared to China; that’s why more firms are seeking bigger-ticket buyouts in Australia and Japan. That will eventually weigh on performance in the region, which for top-quartile Asia funds last year was a very respectable median 25% net internal rate of return, per Preqin. Private equity’s cooling relationship with China, though, is likely to hit hard for most.

Persons: Neil Shen, Shailendra Singh, Singh, Zhang Lei, There’s, Shen, Antony Currie, Katrina Hamlin Organizations: Reuters, Bain & Co, Bain Capital, KKR, XV Partners, Sequoia, Twitter, NEWS Venture, Sequoia Capital, Thomson Locations: SINGAPORE, China, Asia, Republic, Sequoia, India, Southeast Asia, Greater China, Malaysia, Philippines, Indonesia, Thailand, Hillhouse, Singapore, Australia, Japan, U.S

☆ Toyota gets activism, without the activists
▼ + stars: | 2023-06-05 | by ( ) www.reuters.com time to read: +2 min

SINGAPORE, June 5 (Reuters Breakingviews) - It’s one thing to be targeted by pushy activists looking for a quick return. It’s perhaps more embarrassing to receive the wholesale disapproval of American pension funds who are long-term stewards of capital. That’s the position the board of $200 billion carmaker Toyota (7203.T) finds itself in. The pair also favoured a resolution brought by Danish and Dutch pension funds urging Toyota to improve disclosure of its lobbying on climate change. Toyota insists its board adheres to the Tokyo Stock Exchange’s independence standards.

Persons: Akio Toyoda, Katrina Hamlin, Pete Sweeney, Pranav Kiran Organizations: Reuters, Toyota, New York, California Public Employees, Danish, Tokyo Stock, Twitter, Thomson Locations: SINGAPORE, New York City, Una, Saudi, East

☆ Indian ports will test tycoons' safe harbour
▼ + stars: | 2023-06-02 | by ( Pranav Kiran | ) www.reuters.com time to read: +4 min

For the public market wannabe, it tees up a tricky benchmark in a global industry with few listed giants. JSW Infrastructure is closely aligned to India’s growth story. More than half of cargo handled at Indian ports last year was coal, petroleum oil and lubricants. JSW Infrastructure grew revenue 92% in the three years to March 2022, three times as fast as its rival. JSW Infrastructure, India’s second largest commercial ports operator by cargo handling capacity, in May filed for an initial public offering in Mumbai to raise up to 28 billion rupees ($340 million).

Persons: Gautam Adani, Sajjan Jindal, Adani, JSW, ”, Una Galani, Katrina Hamlin Organizations: Reuters, Hindenburg Research, Deloitte, JSW, Infrastructure, Deloitte Haskins, Securities and Exchange Board of India, JM Financial, Axis Bank, State Bank of India, HSBC, Credit Suisse, Thomson Locations: BENGALURU, Mumbai, Goa, Tamil Nadu, West, JSW

☆ Toyota governance fight gets stuck in traffic
▼ + stars: | 2023-05-30 | by ( ) www.reuters.com time to read: +2 min

MELBOURNE, May 30 (Reuters Breakingviews) - Governance campaigns against Japanese companies have a hard enough time gaining traction as it is. ValueAct Capital’s two-year campaign against Seven & i (3382.T) culminated last week with at best just a third of shareholders backing its four board candidates. Glass Lewis asserts just three of Toyota’s 10 board candidates are unaffiliated, fewer than the one-third the advisory sets as a floor. Toyota insists its board meets the Tokyo Stock Exchange’s independence standards. He should go in any event: having the former CEO of 14 years lead the board is bad governance.

☆ India’s moment is obfuscated by its jobs deficit: podcast
▼ + stars: | 2023-05-30 | by ( Una Galani | ) www.reuters.com time to read: 1 min

MUMBAI, May 30 (Reuters Breakingviews) - The country is establishing itself on the global investment map. In this Exchange podcast, author and ex-IMF director Ashoka Mody talks about why executives should look at India’s underemployment problem instead of focusing on its 7% GDP growth as they size-up the opportunity. Listen to the podcastFollow @ugalani on TwitterSubscribe to Breakingviews’ podcasts, Viewsroom and The Exchange. Editing by Pranav KiranOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Saudi is a BRIC in crumbling East-West money wall
▼ + stars: | 2023-05-29 | by ( ) www.reuters.com time to read: +2 min

MUMBAI, May 29 (Reuters Breakingviews) - Middle East money is the answer to plugging the growing financial gaps created in Asia by Western investment restrictions, or at least that’s the very wishful thinking of the regions’ financiers and governments. Even if the NDB might have teamed up with Saudi regardless of sanctions on Russia, any deal will be high on symbolism. It makes sense for petrodollar countries to look East given Asia’s growing oil demand. Bankers also want Middle East companies to come and list in Hong Kong as those from elsewhere stay away and economists believe Middle East funds will step up investments into China as global funds retreat. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Erdogan win sends stark note on economy and votes
▼ + stars: | 2023-05-29 | by ( Lisa Jucca | ) www.reuters.com time to read: +3 min

MILAN, May 29 (Reuters Breakingviews) - Tayyip Erdogan’s re-election in Turkey sends a sharp message to leaders around the world: politics is trumping sound economics. Official results released show the sitting strongman won 52% of ballots, implying citizens are deeply divided over his return to power. Erdogan’s victory will likely exacerbate multiple long-term money-matter headaches for the country’s more than 80 million people. Erdogan’s win also suggests the country will continue to pivot away from the West. Follow @LJucca on TwitterCONTEXT NEWSTurkish President Tayyip Erdogan secured a fresh five-year term in elections on May 28, beating challenger Kemal Kilicdaroglu.

The return of tourists to Southeast Asia, he says, bodes well for the group’s core mobility business in the second half. The next challenge is resetting investor expectations so that beats can shine through. Lower incentives helped it to cut its adjusted operating loss to $66 million from $287 million a year ago. It also narrowed its forecast for annual adjusted operating loss to $195 million-$235 million, from a previous forecast of $275 million-$325 million. China’s Alibaba on May 18 reported revenue of 208 billion yuan ($30.1 billion) in the three months to end-March, up 2% year-on-year.

☆ A Sony spinoff comes better late than never
▼ + stars: | 2023-05-18 | by ( ) www.reuters.com time to read: +2 min

HONG KONG, May 18 (Reuters Breakingviews) - A long-awaited Sony (6758.T) spinoff is finally happening. The Japanese video games-to-semiconductors conglomerate may list its financial subsidiary "within the next two to three years" while retaining a 20% stake. Investors promptly bid up shares of Sony as much as 7% on the news. Partially offloading Sony Financial Services, which the company only took full control of in 2020 for $3.7 billion, makes sense. Sony stresses it is not planning any other spinoffs for now - one of them is plenty to look forward to.

☆ Sea’s rising tide gets a harsh reality check
▼ + stars: | 2023-05-17 | by ( ) www.reuters.com time to read: +2 min

SINGAPORE, May 17 (Reuters Breakingviews) - Sea (SE.N) was sailing strong. The $41 billion Southeast Asian internet giant retreated from overseas markets, slashed marketing spend, and shed thousands of jobs. Still, that wasn’t enough for the company to meet earnings estimates on Tuesday. Li is assuring the market that the company he built – once valued at over $200 billion -- is more self-sufficient. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Vietnam’s Tesla debuts with wrong kind of power
▼ + stars: | 2023-05-15 | by ( Anshuman Daga | ) www.reuters.com time to read: +3 min

Vietnam’s richest man is taking his electric-vehicle company, VinFast, public at a punchy valuation through a merger with casino mogul Lawrence Ho’s special-purpose acquisition company. The tie-up with Black Spade Acquisition Co (BSAQ.N) means VinFast doesn’t have to wait for the market for initial public offerings to improve to make its debut. The SPAC deal values VinFast at 42 times its sales in 2022, a stunning seven times Tesla’s (TSLA.O) multiple and more than twice the multiple of Lucid (LCID.O). But despite the big eye-catching U.S. debut, existing investors will own 99% of the company after the deal. The merger values the Tesla challenger’s equity at $23 billion, not including the $169 million of Black Spade’s cash, and its enterprise including debt at about $27 billion.

☆ Ambani’s finance listing will measure disruption
▼ + stars: | 2023-05-11 | by ( Shritama Bose | ) www.reuters.com time to read: +3 min

Back in 2019 the boss of $200 billion Reliance Industries (RELI.NS) had pledged to spin out its giant retail and digital units. He has since lured big strategic and financial investors including Meta (META.O), Alphabet’s (GOOGL.O) Google and KKR (KKR.N)into those businesses. Jio Financial could be listed as soon as September. The entity will be renamed Jio Financial Services. Jio Financial will list as soon as September, a person familiar with the situation told Breakingviews.

☆ Geopolitics is shrinking India’s risk premium
▼ + stars: | 2023-05-09 | by ( Una Galani | ) www.reuters.com time to read: +7 min

They are lured by a country whose potential as an alternative investment destination to China increasingly outweighs the local challenges of doing business. India’s $3 trillion economy is forecast to grow by 6.5% this fiscal year, continuing to outpace the rest of the world. Executives and investors also see a business-friendly government that is likely to remain in power for the next half-decade. Morgan Stanley analysts and strategists expect India to become the world’s third-largest economy and stock market before the end of the decade. The India risk premium is rapidly disappearing.

☆ It’s time HSBC’s top owner calms down or sells up
▼ + stars: | 2023-05-04 | by ( Una Galani | ) www.reuters.com time to read: +5 min

Sticking around as a noisy unhappy owner with an 8% stake, though, risks hurting itself, HSBC and maybe even Hong Kong. A vote on Friday at HSBC’s annual meeting will test whether Ping An has garnered much support for its stance. A second resolution from the group wants the pre-Covid dividend reinstated and paid at not less than that level each year. Chances are both resolutions will pick up some votes, the latter especially from retail shareholders who globally between them own about one-third of the bank. If any large institutional investment houses join the Chinese group, it will be a blow to HSBC boss Noel Quinn.

☆ Sumitomo triples down on Jefferies at right time
▼ + stars: | 2023-04-28 | by ( Antony Currie | ) www.reuters.com time to read: +3 min

MELBOURNE, April 28 (Reuters Breakingviews) - Jun Ohta may have preferred to catch a bigger Wall Street fish. But the CEO of Japan’s Sumitomo Mitsui Financial Group (8316.T) is expanding his relationship with relative minnow Jefferies (JEF.N) at an opportune moment. The $56 billion SMFG also intends to increase its ownership of the $7.6 billion company run by Richard Handler to 15% by purchasing ordinary shares that it will convert into preferred stock. Slumping deal flow after what Jefferies called an “off-the-charts” 2021 prompted its earnings to more than halve last year. SMFG will buy common stock on the open market and then convert it into non-voting preferred stock.

HONG KONG, April 26 (Reuters Breakingviews) - If Japan is the next Macau, $16 billion MGM Resorts International (MGM.N) may be the only winner left at the table. After years of debate and delays, Japan has finally given approval for a resort in Osaka. But as diversifying from China becomes a popular mantra, this big bet looks smarter than it once did. The 1.08 trillion yen ($8.1 billion) resort is set to open in 2029. U.S. casino operator MGM Resorts International and local partner Orix will each own a 40% stake in the company set up to manage the complex.

☆ Asia's richest banker will loom over his successor
▼ + stars: | 2023-04-25 | by ( Shritama Bose | ) www.reuters.com time to read: +3 min

It will also be messy and is at odds with the regulator’s own aim to improve governance across the industry. Bosses of the country’s private-sector banks are allowed to stay in their jobs for up to 15 years. It is little surprise that more than 99% of investors voted for him to stay, per exchange filings published last week. If Kotak sits on the board, his successor - expected to be an insider – will effectively continue to work with his or her long-time boss. If things go wrong at Kotak, regulators may end up wondering who to blame.

☆ Hong Kong’s dollar stress gets more fundamental
▼ + stars: | 2023-04-24 | 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

HONG KONG, April 24 (Reuters Breakingviews) - Hong Kong’s currency peg to the greenback is stuck between a rock and a hard place. In the past 12 months, the de-facto central bank has stepped in to buy Hong Kong dollars from the market roughly 40 times. Some foreign financiers, including Pershing Square boss Bill Ackman, argue Hong Kong’s financial system can’t sustain the peg and question its rationale. But in the long run, demand for Hong Kong dollars depends on confidence in its economic strategy. Hong Kong’s peg is durable enough for now, but its future is in doubt nevertheless.

☆ 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.

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.

☆ India's HDFC is in fine shape for its big deal
▼ + stars: | 2023-04-17 | by ( ) www.reuters.com time to read: +2 min

HDFC Bank’s (HDBK.NS) net interest income rose 20% year-on-year in the three months to March. The $116 billion financier’s mix of deposits points to some niggles. As interest rates rise, savers tend to move idle funds from low-yielding checking accounts to fixed deposits, where money is locked up for a specific period against juicier interest rates. For now, the hotly watched net interest margin, unchanged at 4.3% for the last nine months, is holding up. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Singapore’s rate pause points to new reality
▼ + stars: | 2023-04-14 | by ( ) www.reuters.com time to read: +2 min

SINGAPORE, April 14 (Reuters Breakingviews) - Singapore’s surprise decision on Friday to keep its monetary policy unchanged leaves one thing unsaid. The Lion City, whose trade volumes dwarf the size of its economy, joins Australia, India and South Korea in standing pat. Singapore has repeatedly warned this would damage the Lion City’s growth outlook. Prime Minister Lee Hsien Loong said in 2019 that it should prepare for these consequences and adapt to new global realities. 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, April 14 (Reuters Breakingviews) - Macau, once the world’s largest gambling hub, is far from a sure bet. For MGM China (2282.HK) and Sands China (1928.HK), the highest is two-thirds more than the lowest, for example. Uncertainty is compounded by onerous obligations companies have to help Macau reduce its dependence on gaming. Take $16 billion MGM Resorts International (MGM.N), whose Japanese resort received a green light on Friday. There’s also $13 billion Wynn Resorts (WYNN.O), which is pushing into the fast-growing United Arab Emirates.

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