HONG KONG (Reuters Breakingviews) - Cathay Pacific’s layoffs may not be the last. Hong Kong’s beleaguered airline is cutting around 8,500 jobs, or 24% of the group's headcount, and shutting down sister brand Cathay Dragon. That’s less severe than some other carriers, although shareholders took it well. The cuts will moreover only slow the cash burn rate. With travel expected to remain depressed next year, more savings will need to be found.
HONG KONG (Reuters Breakingviews) - Corporate carve-ups generally provide a spark. LG Chem’s decision to spin off its batteries business has not electrified investors so far, however. Although some hesitation is warranted, the division’s true value is lost inside a $40 billion chemicals producer.
HONG KONG (Reuters Breakingviews) - The outbreak of Covid-19 is the best thing that ever happened to the mask industry, but it’s going to require a bit of cleaning up. Side effects of the boom include diplomatic spats, quality scandals, price gouging, and fraud. Dealing with excess capacity and a rising mountain of polypropylene waste will be a headache.
HONG KONG (Reuters Breakingviews) - A convenience-store takeover doesn't check out. Japanese trading house Itochu, which already owns just over 50% of FamilyMart, wants to buy the rest of the convenience-store chain in a $5.4 billion deal. The premium is thin, and governance concerns should give investors pause.
HONG KONG (Reuters Breakingviews) - Hong Kong and London could soon have more in common. The recently enacted national security law reduces the relative appeal of the Asian financial hub, just as Brexit has done to the British capital. Deutsche Bank’s new regional chief just chose Singapore instead of Hong Kong, where his predecessor was based. It is one small example of what’s ahead.
HONG KONG (Reuters Breakingviews) - Takeda Pharmaceutical is showing signs of recovery after a mega-merger, but shareholders keep feeling the pain. Some 18 months after completing a $62 billion takeover of Irish rival Shire, the Japanese drugmaker may sell another business to further pare debt. Promised cost savings are also materialising. A weak stock performance, however, suggests Chief Executive Christophe Weber overpaid.
HONG KONG (Reuters Breakingviews) - Zoom Video Communications is getting even more entangled in politics. The $62 billion videoconferencing service temporarily suspended a U.S.-based Chinese activist account after members held an event commemorating China’s Tiananmen Square crackdown in 1989. Like the Chinese owner of TikTok, Zoom founder Eric Yuan needs to start thinking about how to fork his technology or silo his operations to stay in the good graces of Beijing and Washington.
HONG KONG (Reuters Breakingviews) - It has never been truer that the journey is the destination. Travelling has proven resilient after previous crises, which suggests that once a Covid-19 vaccine, treatment or other solution is found, antsy globetrotters will pack their Samsonites in nearly full force again. Notable changes are likely to be in health checks and corporate flyers.
HONG KONG (Reuters Breakingviews) - China's coronavirus past is fuelling hope for global automakers. Car sales in the People's Republic got a boost during the 2003 SARS outbreak, as commuters avoided public transit and purchased personal vehicles for the first time. That same psychology could soon play out in markets where car ownership is low, and perhaps elsewhere.
HONG KONG (Reuters Breakingviews) - The Olympic flame could be extinguished by Covid-19. For now, the Summer Games are set to kick off as planned in Tokyo in late July, but with each passing day the outbreak poses a greater threat to large gatherings and international travel. Any loss from cancellation, though, would be more symbolic than economic.