|Bid||4.3200 x 900|
|Ask||4.5500 x 1400|
|Day's range||4.4300 - 4.5000|
|52-week range||3.1800 - 5.4100|
|Beta (5Y monthly)||1.15|
|PE ratio (TTM)||16.09|
|Forward dividend & yield||0.18 (4.15%)|
|Ex-dividend date||30 Mar 2020|
|1y target est||5.12|
(Bloomberg Opinion) -- China is attempting to create its own JPMorgan Chase & Co. The ambitions could prove hard to satisfy.Regulatory authorities may allow some of the largest commercial lenders into the brokerage industry to perform services that include investment banking, underwriting initial public offerings, retail brokering, and proprietary trading, local media outlet Caixin reported. With capital markets flailing and direct financing struggling to take hold as debt rises across the economy, what better way than to bring in its trillion-dollar whales to boost the financial sector?There is logic to this. Size matters, and the volumes could lead to success. China’s banks have more than $40 trillion in assets; the securities industry’s amount to around 3% of that. The largest lender, Industrial & Commercial Bank of China Ltd., had 32.1 trillion yuan ($4.5 trillion) in assets and 650 million retail customers as of March, according to Goldman Sachs Group Inc. The biggest broker, CITIC Securities Co., had 922 billion yuan and 8.7 million retail clients. Banks have thousands of branches with deeper distribution channels.But banks are the load-bearing pillars of China’s financial system. Regulators have asked lenders to show leniency with hard-up borrowers and to forego profits in the name of national service, in both tough and normal times. Granting brokerage licenses could help them create another channel of (small) profits.Banks stepping in where brokers have failed could help the broader capital markets. In theory, commercial lenders know how to deal with different types of risk, like with the ups and downs in the value of a security and market movements. They’re already big participants in bond markets and have access. Bringing banks into mainstream brokering could help reduce the intensity of risk associated with the trillions of dollars of credit being created in China every month. It may also help solve a persistent problem: the inefficient allocation of credit that has led to mispriced assets.All of this is contingent upon the banks pulling their weight. Going by past experiments, they haven’t brought the heft that Beijing had hoped. Consider China’s life insurance industry. It took bank-backed players in this sector a decade to build a foothold. Their market share grew to 9.2% last year from 2.5% in 2010. The brokerage arms of Chinese banks in Hong Kong have fared little better. Bank of China International Securities, set up in 2002 by Bank of China Ltd., remains a mid-size broker by assets and revenue, Goldman Sachs says. Top executives come from the bank; related-party transactions with the parent account for just about 14% for underwriting business and around 39% for income from asset management fees.Catapulting ICBC to the same stature as JPMorgan — a full service bank with a 200-year history — may take a while. The American financial giant has hired big, and opportunistically built out businesses. It bought and merged with firms like Banc One Corp. and Bear Stearns Cos. and is in consumer banking, prime brokerage and cash clearing. The services it offers run the gamut of credit cards, retail branches, investment banking, and asset management. Shareholders have mostly rewarded the efforts.For China’s biggest lenders, conflicting and competing priorities will make this challenging. They’re already being required to take on more balance sheet risk, lend to weak companies and roll over loans while maintaining capital buffers, keeping depositors happy and essentially martyring themselves. Now, they’ll be adding brokering at a time when traditional revenue sources are shrinking in that business. And it won’t happen overnight, or even in the next two years. As for brokers? Their stock prices dropped on the news that banks would be wading into their territory.Beijing’s efforts to shore up its capital markets may look OK on paper, but they’re increasingly muddled and interests aren’t aligned. As China attempts to make its financial sector more institutional and less fragmented while it’s also letting in foreign banks and brokers, allowing the big homegrown institutions to do more, with additional leeway, doesn’t necessarily make for a stronger system. As I’ve written, experiments like these can have unexpected results.Over time, it won’t be surprising to see China’s large brokers and banks start looking very similar; for instance, big securities firms becoming bank holding-type companies, as one investor suggested. That may be a laudable goal for Beijing, but is it realistic? And does it take into account the problems on the financing side, such as misallocation and transmission? Ultimately, none of this really gets at one big problem: unproductive credit.All the while, regulators are inviting in the likes of the actual JPMorgan Chase and Nomura Holdings Inc. and giving them bigger roles. China won’t be ready. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Nomura (NMR) launches a secure and compliant digital asset custodian for institutional investors along with its crypto-partners, CoinShares and Ledger.
(Bloomberg Opinion) -- The idea of Tencent Holdings Ltd. buying a stake in Chinese video service iQiyi Inc. looks good on paper. Their current rivalry in the content-streaming market undercuts both companies, depressing their earnings.In reality, though, a tie-up between the social media giant and the subsidiary of Baidu Inc. is more likely to look like Didi Chuxing’s buyout of rival Uber Technologies Inc.’s China division. A short-term detente may turn in to an opportunity for other players, which would leave the merged entity back at square one, facing fresh competition.Tencent has approached Baidu about purchasing shares in iQiyi in a deal that would displace the search-engine provider as its biggest shareholder, Reuters reported Tuesday, citing sources it didn’t identify. That would be a big deal, literally, given that Baidu owned 56.2% of the Nasdaq-listed company as of mid-February.IQiyi and Tencent Video are currently the largest long-form video providers in China (as opposed to short form, such as Douyin/TikTok), with around 500 million monthly active users apiece. Alibaba Group Holding Ltd.’s Youku trails with 324 million, Credit Suisse Group AG notes, citing data from researcher QuestMobile.That means there would definitely be synergies if iQiyi and Tencent Video hooked up, notably on content costs, Credit Suisse analysts Tina Long and Ashley Wu wrote. More importantly, iQiyi’s debt and cash burn mean it needs new capital by no later than next quarter, the bank notes.Significantly, there’s a large amount of customer crossover, with about half of each service’s audience using the other, Nomura Holdings Inc. wrote, again citing QuestMobile. Nomura’s skepticism is warranted: After rivals Youku and Tudou merged (now simply called Youku and since acquired by Alibaba), the popularity of the Tudou platform dropped, likely due to overlap. This brings to mind the exit of ride-hailing service Uber Technologies Inc. from China in 2016. The American company’s local business was bought out by Didi in what was widely seen as a win for the Chinese player. The expectation was for market consolidation and a steady flow of profits. Uber left the country with a 20% share in Didi, which is now one of the world’s largest unicorns by value. The move allowed the U.S. firm to stop bleeding money while enjoying the upside of owning a stake in the business it surrendered to.Fast forward, though, and Didi is still struggling to get real pricing power — the key to boosting profitability. On a few occasions, it’s tried to raise prices in a city, only to have rival Meituan Dianping decide to open up ride-hailing there, forcing fares back down.This’s likely what would happen to a Tencent Video consolidation with iQiyi. They could merge their services completely, allowing deep cuts in content costs yet still taking a hit on subscription numbers. Or, they could divide and conquer (one covers sports and animation, the other drama and variety), but that would require almost as much video to be produced to keep the combined user base. Or, services could be bundled with a discount to users taking both; that would entail a loss of revenue.Even if the companies manage to pull off the technical, management and financial aspects of a merger, they still might not be able to control the market enough to assert power in the long term.The remaining entity would not only be competing with Alibaba’s Youku. It would also be squaring off against any provider of content that grabs the attention of consumers. Bytedance Inc.’s Douyin (the domestic version of TikTok) is gaining traction, while Tencent’s own gaming titles continue to eat up user time. Then there’s the very real possibility that a new entrant would come along and start things up all over again.Both Tencent and iQiyi might win the video-streaming battle by calling a truce with each other, but remember that the real winner of China’s taxi wars was the one that’s no longer in the fight. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Chinese tech firms are expanding their footprint in Hong Kong even as the pandemic prompts some banks to consider scaling back in the world’s most expensive office market.TikTok owner ByteDance Ltd. and Alibaba Group Holding Ltd. have signed leases to add office space in Hong Kong, according to people familiar with the matter who asked not to be identified as the matter is private.ByteDance took out a three-year lease on about 3,000 square feet (279 square meters) of space in Causeway Bay’s Times Square, according to a person familiar. Alibaba has also signed up for one more floor spanning approximately 17,000 square feet in the same building, one of the people said. The firm currently leases three floors and a dozen more units.Representatives for ByteDance and Alibaba declined to comment.The new leases underscore the twin tech giants’ ambition to broaden their global footprint, as growth in their home market slows. While ByteDance is looking for the next global hit to replicate TikTok’s success in online entertainment, Alibaba’s divisions including e-commerce and cloud computing are tapping overseas clients and customers.Bytedance’s valuation has surged to more than $100 billion in recent private share transactions, as investor confidence in the popular TikTok video platform grows. The company previously laid out an aggressive expansion plan of providing 40,000 new jobs in 2020. Those include two Hong Kong-based positions for crafting content policies, according to ByteDance’s job referral site.Bank OfficesThe expansion of the Chinese tech giants comes as some financial firms reassess their office needs with so many staff working from home. The city is also mired in its deepest recession on record, and faces growing tension over a new security law proposed by China.In March, Nomura Holdings Inc. said it will cut its space in Two International Finance Centre when a new lease takes effect at the start of 2021. Macquarie Group Ltd. is handing back space in One International Finance Centre that the Australian investment bank had sublet to a co-working provider.As companies look to cut costs, demand for office space has declined. The average vacancy rate across the city’s major business areas rose to 7.2% in April, the highest since October 2009, according to Jones Lang LaSalle Inc. Meanwhile, rents dropped 3% in April from March, the property agency said.Hong Kong’s Central district has the world’s highest rents for office space, averaging $313 per square foot, topping New York’s Midtown and London’s West End, data from JLL show.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Nomura's (NMR) business strategy involves investments in private businesses and digitization in order to improve the company's prospects.
Good day everyone and welcome to today's Nomura Holdings Fourth Quarter and Full-Year Operating Results for Fiscal Year Ended March 2020 Conference Call. This slide outlines some of the initiatives we have undertaken to help our employees, clients and communities.
In sync with Goldman Sachs' (GS) efforts to gain majority control in the joint venture and improve profitability, the bank announces plans to increase workforce in China.
TD Ameritrade (AMTD) appears to be a promising bet riding on robust prospects and long-term growth opportunities. However, expenses witness a rise.
Following the approval, T. Rowe Price (TROW) will be able to offer active strategies without the need to disclose certain information that might be harmful to the interests of fund shareholders.
BlackRock (BLK) is in preliminary talks with Tencent over the past year to develop a partnership in an effort to expand in the China mutual fund market.
Goldman (GS) might acquire a majority stake of 51% holding in its Chinese investment banking joint venture, Goldman Sachs Gao Hua Securities Co.