|Bid||236.400 x 0|
|Ask||236.600 x 0|
|Day's range||235.400 - 239.000|
|52-week range||198.000 - 286.200|
|Beta (3Y monthly)||1.25|
|PE ratio (TTM)||31.55|
|Earnings date||6 Nov 2019|
|Forward dividend & yield||7.44 (3.14%)|
|1y target est||283.00|
In 2010 Charles Li was appointed CEO of Hong Kong Exchanges and Clearing Limited (HKG:388). First, this article will...
Hong Kong stock exchange boss Charles Li ignited his unrequited overture to the London Stock Exchange with a riff on Romeo and Juliet as a corporate romance, and doused it in a wistful blog reference to the author of 'Alice in Wonderland'. After this week dropping the shock $39 billion approach, will Chief Executive Li's next post outlining a strategic vision for the bourse swap British literary references for a metaphor from a Chinese classic? Investors and analysts expect Hong Kong Exchanges & Clearing (HKEX) to refocus its efforts - for now - on expanding its links with mainland Chinese counterparts following the collapse of its ambitions to build a global exchange platform via a merger with the London Stock Exchange Group (LSE) .
European shares fell on Tuesday as an escalation in U.S.-China trade tensions and Brexit worries along with disappointing corporate news dented sentiment. The U.S. government widened its trade blacklist to include some of China's top artificial intelligence (AI) startups on Tuesday, and a South China Morning Post report said China had toned down its expectations ahead of high-level talks between Washington and Beijing this week.
UK-focused stocks from Tesco to housebuilders sank on Tuesday as worries over a no-deal Brexit peaked after a Downing Street source said a divorce deal was essentially impossible, while LSE dropped after the Hong Kong bourse dropped its takeover bid. The FTSE 250 index, whose constituents make half their earnings from the UK, stumbled to its lowest in more than a month and ended 1.1% lower.
European shares ticked higher in early trading on Tuesday, helped by gains in Airbus shares and data showing an unexpected rise in industrial output in Germany, while caution prevailed ahead of U.S.-China trade talks. The pan-European STOXX 600 index was up 0.1% by 0715 GMT, with most regional bourses trading higher. Airbus rose 2.2%, after the planemaker reported higher orders for the first nine months of the year, putting it well ahead of U.S. rival Boeing Co.
(Bloomberg Opinion) -- That was quick. Workers in Hong Kong’s finance industry returned to the office after a long weekend of violent protests to find that their stock exchange has decided not to pursue a takeover bid for its London counterpart.The limp end to its month-long courtship has left Charles Li, chief executive officer of Hong Kong Exchanges & Clearing Ltd., looking rather silly. One can’t help wondering if the exchange has any leadership, vision or ambition left. The same can’t be said of London Stock Exchange Group Plc. By bidding for Refinitiv, the LSE is taking on a lot of risk. On completion of the deal, the exchange’s net-debt-to-Ebitda ratio would rise to 3.5 times, well above the 1 to 2 times range that its management deems comfortable. It will take the LSE more than two years to bring its debt level back down – and even that estimated time scale is seen as ambitious by analysts. Yet the London exchange is charging ahead, in the face of Brexit and a deteriorating global economic outlook, to diversify away from trading revenue that’s being eroded by the rise of passive investing.HKEX’s pursuit was half-hearted at best. With a squeaky-clean balance sheet, the company could have done a lot more. If it had been willing to bring its leverage ratio to the same level that LSE is tolerating, HKEX would have had more than $18 billion in cash to sweeten its offer. While LSE management was scathingly dismissive of the HKEX offer, many of its shareholders might well have been tempted – especially if the Hong Kong exchange had increased the cash component of its bid. After all, immediate cash-on-hand is always appealing for passive fund managers, which account for almost all of LSE’s ownership. What’s left for Hong Kong? The 200,000-odd finance professionals employed in the city will be asking themselves. HKEX CEO Li, who earned HK$29 million ($3.7 million) last year, likes to talk up Hong Kong as the gateway for foreign capital to China. Reality suggests otherwise. Wary that the Trump administration will limit U.S. investments into China, American fund managers are already tiptoeing away. They got their latest warning on Monday, when Hangzhou Hikvision Digital Technology Co. was placed on a U.S. blacklist. In 2018, foreigners owned more than 10% of the surveillance camera maker. Local retail and institutional investors accounted for only 30% of HKEX trading last year, according to the exchange. Americans are the second-largest outside investors, after those from mainland China, accounting for 10% of Hong Kong’s total trading. The actual number is likely to be quite a bit higher, as U.S. banks also trade Hong Kong stocks using their principal accounts. Billions of dollars will flee as U.S.-China trade tensions escalate. Those still brave enough to stick around may look to the mainland market instead. China’s announcement that it will remove quotas on buying Chinese stocks and bonds in September is a clear sign that Beijing is looking for an onshore alternative to Hong Kong. There’s something to be said for the Chinese market: While the Shanghai and Shenzhen exchanges are near par with Hong Kong by market cap, stocks there are a lot more liquid.At times of economic distress in the mainland, state-owned enterprises routinely perform national service, piling on debt to build roads to nowhere and provide employment. With almost half its board appointed by the Hong Kong administration and its chairman picked by the city’s chief executive, HKEX has the characteristics of a local government financing vehicle in China. So why is the exchange so timid in its drive to maintain Hong Kong’s relevance as a financial center? HKEX shareholders may be cheering after it dropped the LSE bid. Many finance workers won’t be. To contact the author of this story: Shuli Ren at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Bankers had a tough time in recent weeks trying to decide whether to support Hong Kong Exchanges & Clearing Ltd.’s bid for its London counterpart. In the end, before many of them made up their minds, the deal fell apart.HKEX said on Tuesday it won’t proceed with its 29.6 billion-pound ($36.4 billion) unsolicited takeover bid for London Stock Exchange Group Plc. While HKEX’s board continues to see a combination as “strategically compelling,” it’s “disappointed that it has been unable to engage with the management of LSEG in realizing this vision,” the exchange said.A successful deal would have marked the biggest transaction out of Asia during a slow year for M&A, something that would normally send banks flocking to the buyer’s side to try and get a slice of the action. But in this case, the long-term risks of supporting an unsolicited offer could have proved higher.HKEX had been discussing borrowing between 7 billion pounds and 8 billion pounds to back its proposed takeover, Bloomberg News reported last month. Lenders considering whether to join the financing have been weighing the likelihood that the deal will turn hostile after London Stock Exchange Group Plc’s initial rejection, people with knowledge of the matter said.Finding funding for a successful takeover would have relied on explaining the sound foundation of the deal to both shareholders and regulators, according to Randy Kroszner, a professor at The University of Chicago Booth School of Business.“In very high profile deals where there is often politics involved, like exchanges, banks must get the balance right,“ said Kroszner, who is also deputy dean for Chicago Booth’s executive programs. “They must be sure to provide the best advice they can, and offer a sound basis in terms of pricing and deal structure to ensure a reasonable outcome.”Banks typically prefer to work on friendly, agreed deals as hostile transactions can end up hurting long-term relationships with prospective clients. Some banks that had spoken to HKEX were concerned that joining the funding may have jeopardized future work for Blackstone Group Inc., one of Wall Street’s biggest fee payers, according to the people.That’s in addition to any potential damage they were considering to their relationship with LSE, the people said, asking not to be identified because the information is private. HKEX’s bid was conditional on LSE dropping its own $27 billion acquisition of Blackstone-backed data provider Refinitiv.Potential FeesAt stake was up to $100 million in fees that banks could have earned from the Hong Kong bourse operator, according to New York-based consulting firm Freeman & Co. HKEX could have paid out fees of as much as 0.5% of the financing package’s value to banks providing initial funding for the deal, in addition to roughly $30 million to $50 million in M&A advisory fees, Freeman estimates.A representative for HKEX declined to comment on the challenges of the financing when Bloomberg News reached out on Monday.A successful takeover would have turned into one of the biggest global deals of the year and help lift volumes in Asia and Europe. Announced mergers and acquisitions involving Asian companies are down 23% this year to $735.4 billion, while deal volumes are down 20% in Europe to $822.5 billion, data compiled by Bloomberg show.HKEX has been advised on the bid by Moelis & Co. It later added UBS Group AG and HSBC Holdings Plc to its stable of advisers and used Credit Suisse Group AG to arrange some meetings with LSE investors, people with knowledge of the matter said last month. Goldman Sachs Group Inc., Morgan Stanley and Robey Warshaw have been lead advisers to LSE, which has also been working with Barclays Plc and corporate broker Royal Bank of Canada.(Updates with HKEX’s decision to walk away from deal in second paragraph)\--With assistance from Jan-Henrik Förster.To contact the reporter on this story: Manuel Baigorri in Hong Kong at email@example.comTo contact the editors responsible for this story: Fion Li at firstname.lastname@example.org, Ben Scent, Ville HeiskanenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Hong Kong's bourse has scrapped its unsolicited $39 billion approach for London Stock Exchange Group after failing to convince LSE management and investors to back a move that could have transformed both global financial services giants. Last month's surprise cash-and-shares approach threatened to upend the LSE's $27 billion plan to buy data and analytics firm Refinitiv. The Hong Kong exchange had said the LSE would have to ditch the Refinitiv deal for its offer to go ahead.
European shares ended a tumultuous week on a high note on Friday as data showing modest U.S. jobs growth lifted sentiment slightly, pushing a pan-region index to its best day in more than three weeks. A raft of weak economic data from the United States and Europe, and threats of a transatlantic trade war between the European Union and the U.S, had knocked European shares this week, shaving nearly 3% off the pan-European STOXX 600 index in its worst week in two months.
European shares rose on Friday as investors were hopeful of further monetary easing from the U.S. Federal Reserve in the wake of poor economic data, while chip stocks nudged higher after a report said Apple was increasing production of its new iPhone models. The pan-European STOXX 600 index rose 0.3% by 0713 GMT, led by a 1% jump in the technology index. Chipmakers were among the top gainers after a report said Apple Inc would increase its iPhone 11 production.
Some London Stock Exchange investors have told Hong Kong Exchanges and Clearing (HKEX) that any bid must contain more cash and be up to 20% higher to persuade them to engage, three shareholders and a banking source close to the deal said. The three investors, who own a combined 3% of LSE, said HKEX has been lobbying them to back a potential $39 billion cash and share offer for the London exchange after it made a surprise approach last month. LSE quickly rejected HKEX's initial approach, saying it faced regulatory hurdles and did not make strategic sense.
(Bloomberg) -- Hong Kong Exchanges & Clearing Ltd. is in talks with banks for a loan to back its proposed takeover bid for London Stock Exchange Group Plc, people familiar with the matter said.The bourse has been discussing borrowing between 7 billion pounds and 8 billion pounds ($9.8 billion), according to the people, who asked not to be identified because the information is private. It’s seeking to form a syndicate of several lenders, the people said.Under U.K. takeover rules, HKEX must submit a formal offer by Oct. 9 unless LSE grants an extension. Executives from the Hong Kong exchange are in London last week, meeting with LSE shareholders to convince them of the merits of the deal, which is known internally at HKEX as “Project Lima,” according to the people.As part of its proposal, the Hong Kong bourse is demanding LSE walk away from its own $27 billion deal for data provider Refinitiv. A total of 18 banks signed a $13.5 billion bridge loan this month for that acquisition.Shares of HKEX rose as much as 2.3% during Monday morning trading in Hong Kong, while the benchmark Hang Seng Index was little changed.LSE earlier this month rejected HKEX’s 29.6 billion-pound takeover proposal, citing complications ranging from Hong Kong’s unrest to potential problems with regulators. HKEX is counterattacking with a charm offensive, bringing in UBS Group AG and HSBC Holdings Plc to convince shareholders of the merits of its own proposal, Bloomberg News reported last week.In a note Thursday, a Sandler O’Neill & Partners analyst said his firm hosted an investor meeting with HKEX Chief Executive Officer Charles Li and co-President Romnesh Lamba this week. The executives emphasized the merits of combining an Asian exchange with a European counterpart, given little overlap in their respective capabilities, the note said.HKEX is concerned that LSE will try to “run out the clock” before the Oct. 9 deadline, given the target’s lack of cooperation so far, the Sandler O’Neill note said.Some of the Hong Kong firm’s pitches to the U.K. company’s investors have been met with ambivalence so far, the people familiar with the matter said, as some fund managers told HKEX that they like LSE’s Refinitiv deal and HKEX’s bid isn’t high enough.No final agreements have been reached, and details of the financing could still change, the people said. A representative for HKEX declined to comment.(Adds HKEX share performance in fifth paragraph.)\--With assistance from Jan-Henrik Förster and Carol Zhong.To contact the reporters on this story: Manuel Baigorri in Hong Kong at email@example.com;Annie Lee in Hong Kong at firstname.lastname@example.org;Viren Vaghela in London at email@example.comTo contact the editors responsible for this story: Fion Li at firstname.lastname@example.org, ;Neha D'silva at email@example.com, Keith Campbell, Marion DakersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
'Together we complete each other,' HKEX chief executive Charles tells the London Stock Exchange.
Hong Kong Exchange and Clearing (HKEX) said it was "thinking big" in its $39 billion London Stock Exchange bid as LSE CEO David Schwimmer said he was sticking with his $27 billion purchase of data and analytics company Refinitiv. After LSE rebuffed its offer, HKEX is appealing directly to LSE shareholders and has until Oct. 9 to decide whether to go hostile. HKEX has said that the LSE must ditch its bid for Refinitiv for its offer to go ahead.
(Bloomberg Opinion) -- The world’s biggest brewer should raise a glass to Singapore.Anheuser-Busch InBev NV can probably thank the city-state’s sovereign wealth fund for saving its Asian unit’s Hong Kong initial public offering from an ignominious second failure. GIC Pte committed to invest $1 billion in Budweiser Brewing Company APAC Ltd., which raised about $5 billion after pricing its shares at the bottom of a marketed range.In July, AB InBev pulled a $9.8 billion sale that would have been the world’s largest IPO this year after struggling to draw enough orders at the valuation sought. On that occasion, Budweiser Brewing eschewed the common Hong Kong practice of setting aside a block of stock for so-called cornerstone investors – companies, institutions or wealthy individuals that commit to invest and hold their shares for a minimum period, signaling confidence in a listing’s prospects to the wider public.A successful Budweiser Brewing offering in July would have dealt a blow to the cornerstone custom, as I observed then. Instead, it was the company that suffered. This time around, it went the conventional route.Just as well. Despite halving its fundraising target, the company failed to create much buzz. Its valuation again looks to have been ambitious. At the bottom of the price range, Budweiser Brewing was priced at 17 times estimated 2020 enterprise value to Ebitda. That compares with 18.5 times for China Resources Beer Holdings Co., maker of the country’s best-selling Snow brand. Arun George, an analyst who writes on Smartkarma, estimated Budweiser Brewing should trade at 16 times EV/Ebitda.After the collapse of the July IPO, AB InBev sold the unit’s Australian business for $11.3 billion to Asahi Group Holdings Ltd. That enabled bankers to pitch the pared-down business as a growth play focused more tightly on developing Asia, particularly China. AB InBev has 46.6% of the market of the market for premium and super-premium beer in China, more than triple the share of nearest rival Tsingtao Brewery Co. The share of 2018 Ebitda drawn from the company’s Asia Pacific West region – comprising China, India and Vietnam – rose to 72% from 50% after the Australian sale, according to Bernstein Research.However, that still leaves a substantial chunk of earnings contributed by a slower-growing Asia Pacific East region that includes South Korea, Japan and New Zealand. In that light, the support of a heavyweight investor such as GIC may have made the difference in getting Budweiser Brewing over the line.The irony of Singapore riding to the rescue won’t have been lost on Hong Kong Exchanges & Clearing Ltd. The rival Asian financial center stands to gain more than most from the political turmoil and U.S.-China trade tensions that have weighed on the Hong Kong stock exchange. A successful Budweiser Brewing listing may be critical in shoring up investor sentiment for a pipeline of IPOs to come that includes the lucrative secondary listing of Alibaba Group Holding Ltd.That still depends on how the stock performs once it starts trading, scheduled for Sept. 30. Keep the beer on ice until then. To contact the author of this story: Nisha Gopalan at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.