Bottom line: Alibaba’s new cloud tie-up shows that Korea is a primary market for its global expansion, while the new $4.5 billion funding for its Ant Financial affiliate could be followed by an IPO within the next 12 months.
Alibaba in Korea cloud initiative
E-commerce giant Alibaba (NYSE: BABA) is in a couple of major headlines today, led by word that its Ant Financial affiliate has just raised a whopping $4.5 billion in only its second-ever funding round. That particular story has been rippling through the headlines for a few weeks now, and is most notable because the deal is finally done and is triple the company’s original fund-raising target.
The other headline has Alibaba itself in a new deal to launch cloud computing services in South Korea, working in a partnership with a unit of local telecoms giant SK Telecom (Seoul: 017670). This particular deal is interesting because it represents Alibaba’s recent search for global growth stories, in a bid to satisfy investors worried about a slowdown in its home China market. Read Full Post…
Bottom line: Domestic buyers are likely to comprise most of the investors in Ant Financial’s latest fund raising, though the use of foreign advisers indicates some overseas participation may also be allowed.
Ant Financial raises new funds
Ant Financial, the financial services arm of e-commerce giant Alibaba (NYSE: BABA), is going back to investors for a new mega fund-raising, just a year after taking money from private investors for the first time. But any foreigners hoping to buy into Ant will probably be disappointed, since it appears this new funding round will be mostly open to Chinese institutional buyers. Likewise, Ant’s IPO that could come as soon as next year is likely to happen on one of China’s domestic stock markets, again locking out foreign investors.
Perhaps it’s only fair that foreign investors stand on the sidelines in Ant’s high-growth story, since such investors already have easy access to some of China’s top private companies that are listed overseas. By comparison, domestic Chinese investors have little or no access to shares of Alibaba, Baidu (Nasdaq: BIDU) or Tencent (HKEx: 700), even though that trio of corporate giants derive nearly all their money from China’s booming Internet market. Read Full Post…
Bottom line: China Postal Bank’s signing of several major global institutions as cornerstone investors reflects the attractiveness of conservative financial service firms as China’s economy slows.
Conservative Postal Bank draws big global investors
What’s likely to be this year’s biggest IPO has just moved one step closer to market, with word that Postal Savings Bank of China is near a deal to sell about 15 percent of itself to a group of mostly foreign investors ahead of a planned $20 billion new offering. This particular IPO will provide one of the most conservative choices yet to investors looking to buy into China’s financial services market.
That’s because Postal Bank historically served as a place for consumers to park their savings, and did little actual lending like traditional banks. That difference appears to be a major factor making Postal Bank so attractive now compared with more traditional lenders like ICBC(HKEx: 1398; Shanghai: 601398), which are standing on the cusp of a bad loan crisis as China’s economy rapidly slows. Read Full Post…
Bottom line: Citic Securities’ new tie-up with China’s Social Security Fund should bring it major new business, while CCB’s Indonesian tie-up talks reflect its approach of moving slowly into emerging markets for its nascent global expansion.
Citic Securities ties with Social Security Fund
Two big finance stories are casting a spotlight on different trends in China’s rapidly transforming financial services sector as Beijing tries to create an industry that can compete with the big global players. The larger news is domestically focused, with leading stock brokerage Citic Securities (HKEx: 6030; Shanghai: 600030) in a major new tie-up with China’s Social Security Fund that will see the pair cooperate in a wide array of financial services areas. The other news is outward looking, and has China Construction Bank (HKEx: 939; Shanghai: 601939) in talks to form a relatively modest new tie-up with a local bank in Indonesia. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 9. To view a full article or story, click on the link next to the headline.
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The following press releases and media reports about Chinese companies were carried on March 28-30. To view a full article or story, click on the link next to the headline.
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HP (NYSE: HPQ) To Sell 51 Pct Of H3C Unit To Tsinghua Unigroup, Seeks $5 Bln (Chinese article)
Geely (HKEx: 175) Invests 250 Mln Pounds On British New Energy Taxi Plant (Chinese article)
Gome (HKEx: 493) To Open 100,000 Microstores On WeChat (English article)
China Construction Bank (HKEx: 939) Announces Annual 2014 Results (HKEx announcement)
Telsa (Nasdaq: TSLA) To Localize Production In China In 3 Years: Elon Musk (English article)
Bottom line: Bank of China’s Hong Kong arm is likely to find limited interest in a sale of its Nanyang Commercial Bank unit, as a slowing Chinese economy cools offshore interest in buying Hong Kong banks.
Bank of China looks to sell Nanyang Bank
A new report about a potential major bank sale in Hong Kong made me realize that a widely expected rush to buy locally based lenders in the former British colony never materialized. This latest report that the Hong Kong unit of Bank of China (HKEx: 3988; Shanghai: 601398) is shopping its locally-based Nanyang Commercial Bank might rekindle speculation that a flurry of new sales is coming. But the potential buyers mentioned in the report make such a gold rush look unlikely, indicating local Hong Kong banks may be losing their appeal as acquisition targets for Chinese and other global lenders. Read Full Post…
Bottom line: BBVA’s cut-back in its alliance with Citic represents the latest divorce between western banks and Chinese partners, with little new foreign investment likely in the sector for the next 2-3 years.
BBVA sells stake in Citic unit
A trend that’s been quiet for more than a year has popped back into the headlines, with word that Spain’s second largest bank has dumped its stake in a holding company tied to Chinese financial services conglomerate Citic Group. This particular deal is being driven by a number of factors, including a need for cash by Spain’s Banco Bilbao Vizcaya Argentaria SA (BBVA). But the bottom line is that BBVA and other major foreign banks have ended most of their similar alliances with Chinese partners over the last 3 years after such tie-ups failed to produce any strategic benefits. Read Full Post…
Bottom line: Shares of China’s big 4 banks could see some upside in the next year, as they work with Beijing to keep their bad loans and slowing profit growth within government-set limits.
Qatar sells down AgBank stake
A major sell-down by one of Agricultural Bank of China’s (HKEx: 1288; Shanghai: 601288) largest foreign shareholders looks a bit ominous for the lender, coming just after all of the nation’s big 4 banks reported rapidly declining profit growth and swelling bad loans. That raises the bigger question of whether we could see a broader exodus from Chinese banking shares by investors in the months ahead, and whether the stocks are looking at a longer term downturn while they work out the billions of dollars in non-performing loans on their books. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 30-September 1. To view a full article or story, click on the link next to the headline.
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6 Detained, Arrested In Husi Tainted Meat Scandal (Chinese article)
iPhone 6 May Cost More Than 6,000 Yuan As Telcos Trim Subsidies (Chinese article)
Tesla (Nasdaq: TSLA), Unicom (HKEx: 763) To Build Charging Outlets Across China (English article)
China Construction Bank (HKEx: 939) Announces Interim Results (HKEx announcement)
Game Maker Linekong Files For HK IPO, Gets Baidu (Nasdaq: BIDU) Funding (Chinese article)
I’ve largely ignored a steady stream of announcements by China’s big 4 state-run banks these past few weeks, but the latest plans released on the same day from 2 of those seemed like a good opportunity to finally focus on this exercise that could soak as much as 400 billion yuan ($63 billion) from the market. My main reason for ignoring the announcements was mostly because they were too numerous to write about individually, and also because much of the fund raising was expected. But the sheer size of this exercise, plus the broader implications for investors, seems like a good reason for writing now. Read Full Post…
