PC giant Lenovo (HKEx: 992) has announced plans for a major new bond issue, in the latest signal that it still hopes to revive stalled talks to buy IBM’s (NYSE: IBM) low-end server business. More broadly speaking, this announcement also marks a new chapter in Lenovo’s development as it adds bonds to its arsenal of to tools for financing global M&A. In the past, Lenovo typically gave stock to finance a big part of its global M&A, which was the case with its landmark purchase of IBM’s PC business in 2005 and its more recent formation of a joint venture with Japan’s NEC (Tokyo: 6701). Read Full Post…
China’s oil and resource companies have been on a buying binge over the last year, snapping up global assets at what look like relative bargains from cash-strapped global companies under pressure to raise money. Beijing has been paying the bills for most of the purchases so far, but the latest announcement from oil refining giant Sinopec (HKEx: 386; Shanghai: 600028; NYSE: SNP) indicates that China may be testing the waters to see if investors are willing to help pay some of the bill in this global buying binge. If that’s the case, Beijing may soon face some major resistance from its major resource companies’ shareholders, who are likely to question whether Sinopec and other Chinese resource firms are getting good value for their money.
China’s young insurance market has proven attractive to foreign players for its huge potential, but has also been an extremely difficult place for them to do business due to numerous obstacles and competition from local players. That reality appears to be a major factor behind an uneasy alliance that has just been announced between US insurance giant AIG (NYSE: AIG) and Chinese counterpart PICC Group, who have signaled their intent to form a life insurance joint venture just as PICC is raising up to $3.6 billion in a Hong Kong IPO.
China’s biggest brokerage CITIC Securities (HKEx: 6030; Shanghai: 600030) could be a company to watch over the next 2-3 years as it attempts to become the country’s first truly global player using its newly acquired CLSA unit as a stepping stone. If I were making bets, I would say the company has the resources it needs to become one of the top second-tier global players in the next 4 or 5 years, competing successfully with the likes of names like Japan’s Nomura and Britain’s Barclays Capital. If it can do that, I would even give the company a chance of eventually entering the echelons of a global elite that includes names like Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS), though that will take at least a decade or possibly longer.
The latest signs of trouble in China’s overheated Internet sector are bubbling into the headlines again, with word that group discount leader LaShou has scrapped its troubled IPO while another high level executive has resigned from e-commerce giant Jingdong Mall, also known as 360Buy. Both developments have some company-specific issues behind them, but more broadly speaking they also reflect an overheated China Internet that has seen internal turbulence grow at many companies as they struggle for dominance and simply survival.
After at least a month or 2 of silence from Jingdong Mall about its schizophrenic plans for a mega-IPO, the e-commerce giant that also goes by the name of 360Buy has suddenly vaulted back into the headlines with talk that it’s preparing a listing as soon as September. I honestly don’t know what to think of these latest reports anymore, as the company has sent so many contradictory signs on the IPO issue over the last year, with CEO Liu Qiangdong publicly denying plans for any such offering for at least a couple of years, even as unnamed people from the investment community say differently. I would have possibly have ignored these latest reports, except that they contain a level of detail that looks too deep to be purely gossip and speculation. (
Just a week after a top Chinese auto rental firm scrapped its plans for a New York IPO, another auto specialist, Yongda Automobile Services has also junked plans for a listing in Hong Kong, reflecting not only cooling overseas demand for Chinese IPOs but also the chill that is settling over the country’s auto sector. But the true test for offshore Chinese IPOs could still be coming, as insurance major PICC gets set for a mega-IPO in Shanghai and Hong Kong to raise up to $6 billion. Let’s look at the Yongda news first, which has seen the operator of China’s largest distributor of cars from luxury German automaker BMW (Frankfurt: BMWG) cancel its plans for a Hong Kong plan to raise up to $430 million due to anemic demand. (
After scooping up a steady stream of Chinese bank shares being dumped by other major institutional investors over the past year, the Singapore government appears to be placing its bets on China’s biggest lender, ICBC (HKEx: 1398; Shanghai: 601398), based on its latest move. Before I get into the details behind the lmove by Temasek, Singapore’s big sovereign wealth fund, I should say that I agree that ICBC looks like the most attractive of China’s big bank stocks, both due to its traditional position as a business lender in the domestic market and also for its smart foreign expansion strategy focusing on developing markets. Now let’s take a look at the actual news, which has Temasek confirming that it is selling $2.4 billion worth of shares of 2 other top Chinese lenders, Bank of China (HKEx: 3988; Shanghai: 601398) and China Construction Bank (HKEx: 939; Shanghai: 601939). (
