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Tue, 28 May: Five things to know to start your day

Business Maverick

Business Maverick

Tue, 28 May: Five things to know to start your day

Jack Ma, chairman of Alibaba Group Holding Ltd., left, gestures while speaking during a fireside interview at the Viva Technology conference in Paris, France, on Thursday, May 16, 2019. Donald Trump’s latest offensive against China’s Huawei Technologies Co. puts Europe in an even bigger bind over which side to pick, but France's President Emmanuel Macron is holding the line. Photographer: Marlene Awaad/Bloomberg
By Bloomberg
28 May 2019 0

Alibaba is planning a potential offering in Hong Kong following its record-breaking New York IPO. Asian futures look to a positive open after European stocks and bonds climbed, and Bitcoin bounces back. Here are some of the things people in markets are talking about today.

Alibaba’s IPO Redux

Alibaba is going back for a second helping. The e-commerce giant is working on a potential Hong Kong share offering that could raise $20 billion after its record-breaking 2014 New York IPO, people familiar said. The listing would bring China’s largest company closer to domestic investors, diversify its funding channels and boost liquidity. The move comes as an increasingly hostile US government blacklists Chinese tech companies.

‘Not Ready’ for a Deal

The US isn’t ready to make a trade deal with China, President Donald Trump said while on a state visit to Japan. “I think they probably wish they made the deal that they had on the table before they tried to renegotiate it,” Trump said Monday at a joint press conference with Japanese leader Shinzo Abe. “They would like to make a deal. We’re not ready to make a deal.” Trump said American tariffs on Chinese goods “could go up very, very substantially, very easily.” His comments came after trade talks between the two countries stalled earlier this month. Each side has since blamed the other.

Equity Markets Rise

Asia stocks were set for a muted open as investors mulled comments from President Donald Trump that the U.S. was “not ready” to reach a trade deal with China. The dollar edged higher, while European stocks advanced with bonds after EU elections. U.S. contracts drifted with markets shut Monday for Memorial Day. The Stoxx Europe 600 Index rose for a second straight session, led by carmakers in the wake of Fiat Chrysler’s proposed merger with France’s Renault. A holiday in the U.K. kept volumes low.

Bitcoin’s Back in Black

Bitcoin resumed its march Monday, rising 10% to almost $9,000 and extending the cryptocurrency’s best one-month rally since 2017. Crypto proponents are taking encouragement from growing mainstream interest, including AT&T, which said it will permit customers to pay bills with digital coins, and Fidelity, which is establishing a digital asset trading business for institutional customers.

China Bank Seizure

The Chinese government’s first seizure of a bank in more than two decades is spooking lenders and investors. A Bloomberg index of Hong Kong-listed Chinese banks dropped to a four-month low on Monday after regulators assumed control of Baoshang Bank Co. citing “serious” credit risks. The fall of Baoshang has its roots in the off-loan-book transactions that China’s small banks use to work around rules that restrict them from lending to weak borrowers, as well as evade capital and provisioning requirements. The move will probably heighten investor concerns about the true quality of lenders’ assets, according to China International Capital Corp.

This is what’s caught our eye over the last 24 hours.

The trade war could mean a $600 billion hit to global GDP in 2021. Billionaires differ over “one issue” at Asia’s biggest budget airline. China says it’s “very regrettable” that some U.S. universities have imposed restrictions on student exchanges. Jeremy Corbyn promises to give the U.K. a vote on any Brexit deal. This $108 billion Australian fund is planning a hiring spree in London and New York. Asia can’t satisfy the region’s addiction to chocolate.

 

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