CX Daily: Could Hong Kong and London Stock Exchanges Become One?
Hong Kong exchanges offers $36.5 billion to buy London Stock Exchange
The company behind Hong Kong’s stock exchange offered Wednesday to buy the London Stock Exchange for 29.6 billion pounds ($36.5 billion).
Hong Kong Exchanges and Clearing Ltd. (HKEx) announced that it has proposed combining itself with London Stock Exchange Group PLC, according to the exchange’s press release. The offer price implies a premium of 22.9% on London Stock Exchange Group’s share price at the close of trading on Tuesday.
The proposed deal marks HKEx’s second major overseas expansion attempt since it acquired the London Metal Exchange, the world’s largest market in options and futures contracts on base and other metals, in 2012 for 1.4 billion pounds.
FINANCE & ECONOMICS
In depth /
Unpacking China’s downward retail growth trend
When China’s YOY retail sales growth fell to 9.4% in December 2017 after more than a decade of double-digit single-month growth, it started a bit of a trend. Since then, it has never rebounded past 10%, and this past April even reached the lowest since May 2003's SARS outbreak.
Large household debts resulting from home and car purchases have most likely caused the slowing retail growth, according to one analyst. Both, thanks to various policy changes, have plummeted, with car sales especially dragging down overall retail sales, officials say. Yet final consumption expenditures, which include services and goods, has remained stable, growing around 10%, in recent years. It's a complex picture.
Check out our deep dive.
Chinese banks told to curb loans to developers, homebuyers
Regulators are telling China’s banks to limit lending to property developers and homebuyers even as policymakers are taking measures to shore up slowing economic growth, we've learned.
Since July, regulators have given banks so-called window guidance to control the scale and growth of loans to developers and mortgage borrowers, we learned. Banks whose real estate development loans exceed a certain level were told not to extend new loans to developers.
China's Nasdaq /
China will broaden use of streamlined IPOs tested on STAR Market
In a two-day meeting concluded Tuesday, the China Securities Regulatory Commission unveiled 12 current and future priorities for advancing capital market restructuring. At the top of the list is steadily implementing the registration-based IPO system, which is currently applied only on this board, the commission said.
The market has been expecting an expansion of the registration-based IPO system to Shenzhen’s ChiNext board for growth enterprises after Shanghai’s new STAR Market adopted the system, which simplifies the lengthy approval process that companies now must go through before floating shares on the mainland market.
Local debt /
LGFV under financial pressure skips call option on yuan bond
A Chinese local government financing vehicle (LGFV) opted for the first time to pay a higher interest rate on a local bond instead of fully repaying it, a surprise move that’s seen as adding to investor concern over credit risks in the sector.
Jilin Transportation Investment Group Co., an LGFV for railway construction in China’s northeast Jilin province, said Monday that on a 4.64% 1.5 billion yuan ($210.8 million) perpetual note, it plans to skip the call option, when debt holders can seek repayment. Instead, it will pay an increased coupon of around 8%, according to Bloomberg calculations based on the initial offering terms.
Quick hits /
Stricter regulations push China’s money market funds for major makeover
Anbang offloads luxury hotels to South Korea's Mirae for $5.8 billion
Exclusive: Top ICBC executive to lead Guizhou finance sector
How cash-hungry property developers are skirting curbs on trust loans
China turns to Argentine soy meal in fresh blow to U.S. farmers
Opinion: To the West, China has become a dark stranger
BUSINESS & TECH
Trade war /
Huawei says U.S. needs to talk to company for China trade deal
The U.S. government will need to hold talks with Huawei Technologies Co. for there to be a trade deal with China, a top executive at China’s largest technology company said.
“Can I imagine a trade deal where the U.S. government doesn’t agree to talk to us? No I can’t,” Huawei Chief Security Officer Andy Purdy said at a briefing in Budapest on Tuesday. Huawei has become a focal point for U.S.-Chinese tensions and is regarded by some as a bargaining chip in the negotiations.
Caixin editor-in-chief talks China's pressing business issues, social credit system
In a recent interview with Swiss leadership-focused nonprofit Stars, Caixin's editor-in-chief Wang Shuo talks about what, in his view, are the most pressing business and economic issues in China, including the country’s social credit system.
Wang Shuo: The [social credit system's] purpose and structure are opaque, and it collects data much more broadly [than the financial credit system]. Given the omnipresence of our mobile phones, it is easy for the Chinese government to know everything about our daily behavior. This system applies to both companies and individuals. To me it is not clear what the government’s intentions are. We made arguments in favor of the PBOC model with its clear definitions and terminology, while highlighting the difficulties regarding the social credit system, in particular the lack of justification for the broad and undefined data collection. Unfortunately, I am pessimistic.
Check out the full interview.
Jack Ma /
Alibaba begins a new era after Jack Ma’s retirement
Alibaba Group Holding Ltd.'s new chairman and current CEO Daniel Zhang said Tuesday that Alibaba will continue its global expansion, serving domestic consumption and pushing cloud and big data after founder Jack Ma formally stepped down as executive chairman while the company celebrated its 20th anniversary with an extravagant gala in Hangzhou.
Zhang said Alibaba’s mid-term goal is to service more than 1 billion consumers globally and handle more than 10 trillion transactions by 2024. In the long term, Alibaba expects to create more than 100 million jobs to serve 2 billion users globally and more than 10 million merchants on its platforms by 2036, Zhang said.
Quick hits /
Private tutoring firm opens first center overseas amid sluggish China demand
Tencent-backed secondhand goods trading platform secures $300 million in Series B
Inventory review ahead as Alibaba welcomes new chairman?
Major crypto platform tightens grip on HK-listed entity
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