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    Asian Insider 26 November: Merger mania, Bauhinia Villa, what’s the deal with trade talks?

    Published On: 26 November 2019

    Asian Insider brings you insights into a fast-changing region from our network of correspondents.

     

    26 November 2019

    In today’s bulletin: Nearly $100 billion worth of corporate merger deals were signed over span of 24 hours this week; South Korea is hosting an inaugural summit with Asean leaders; the aftermath of the Hong Kong elections; and more…

     

    MERGER MANIA

    LVMH bought jeweller Tiffany’s in what is the largest buyout in the world of luxury brands in recent memory; Charles Schwab paid US$26 billion for discount brokerage TD Ameritrade; Swiss drugmaker Novartis bought Medicines Co for US$9.7 billion; Canadian convenience store Alimentation offered AUD$8.6  billion for fuel retailer caltex Australia – all of this happening in the span of 24 hours early this week. In total, Bloomberg reported that more than US$70 billion worth of deals was announced in 24 hours. And while there did not appear to be a single theme that binds the different deals, they appear driven by the low cost of financing and reflects optimism in the economy.

    Read more on the LVMH deal: LVMH to buy Tiffany for $22 billion in largest deal for luxury brands

     

    CHINA SETS UP CRISIS COMMAND CENTRE ON HK BORDER

    China has reportedly set up a crisis command centre on the mainland side of the border with Hong Kong to tighten control over its efforts to manage the unrest in the territory. Reuters is reporting that top officials have been meeting at the centre, set up in a leafy compound known as the Bauhinia Villa. They have also been summoning Hong Kong officials, including chief executive Carrie Lam, to the villa for talks. Beijing is also reportedly receiving daily reports from the centre. It is not clear when exactly the villa started operating in this way but it has served the same purpose before – during Occupy Central protests in 2014. That the villa is active again is another sign of Beijing’s concern about the situation in Hong Kong but offers little indication of how it intends to proceed.

    Need to know:

    Hong Kong leader Carrie Lam admits vote revealed ‘unhappiness’ with government but offers no concessions

    China summons US ambassador to protest against US legislation on Hong Kong

    Hong Kong to reopen Cross-Harbour Tunnel on Nov 27 following cleanup after damage in protests

    China’s top diplomat Yang Jiechi strongly condemns US lawmakers’ Hong Kong legislation

     

    ALIBABA DEBUTS ON HONG KONG EXCHANGE

    Chinese e-commerce giant Alibaba Group Holdings made a successful market debut in Hong Kong today, with shares rising 6.3 per cent in pre-market trading. It raised about US$11 billion in what was Hong Kong’s largest stock issuance in nearly a decade. The decision to list in Hong Kong – apart from being a long-time dream of Alibaba founder Jack Ma – also helps shore up confidence in the future of the territory’s economy and will likely earn the company even more goodwill in Beijing.

    See also: Alibaba’s Hong Kong share sale presents a $59 billion dilemma

     

    DEAL OR NO DEAL? AN UPDATE ON TRADE TALKS

    There are so many little twists and turns in the ongoing trade talks between US and China that it’s often hard to keep up. Also, things change so swiftly here, optimism one day can quickly turn to pessimism the next. So here at Asian insider, we just dip in every once in awhile to see where things are going. And where are we? Through November, there has generally been optimism that a Phase 1 trade deal was close to being complete and will likely be signed at some time in the next few months. There was a bump midway when Congress approved legislation designed to support pro-democracy protesters in Hong Kong. Trump has indicated that he may veto the Bill and the latest is that trade negotiators were on the phone today trying to hammer out the deal. In short, a deal still seems likely but that will change if Trump doesn’t end up vetoing the Bill. After 16 months of negotiations, neither US nor China need a deal politically.

    Catch up:

    US and China close to reaching a trade deal, says Trump

    China says US agrees to phased tariff-rollback if trade deal reached

    Asia shares plunge on trade fears after US passes Hong Kong rights bill

     

    SOUTH KOREA’S TIES WITH ASEAN

    Ties between South Korea and Asean have grown rapidly under the administration of President Moon Jae-in, who rolled out a New Southern Policy in 2017 that was aimed at elevating ties with the region to the level of more traditional partners like the US, China, Russia and Japan. Today, as President Moon hosted Asean leaders in Busan, he doubled down on that relationship, laying out his vision for how South Korea and Asean can prosper together. The warm ties with South-east Asia on show today are a marked contrast to the increasingly tense ties Seoul has had with Tokyo and Washington in recent weeks.

    See also: Asean-Korea Summit: ‘Midterm review’ of Moon’s Asean outreach

     

    IN OTHER NEWS

    Museum heist: Thieves smashed display cases and grabbed priceless jewels from an eastern German museum in the early hours of Monday (Nov 25) in a lightning raid on one of Europe’s greatest collections of treasures, police said. The haul was worth up to 1 billion euros (S$1.5 billion), Bild newspaper reported earlier, without giving a source.

    Chin Peng:  The ashes of Communist Party of Malaya (CPM) leader Chin Peng, who lived in exile in Thailand after the CPM was disbanded, has been brought back to Malaysia six years after his death. It was unclear, however, whether the return of his ashes had been sanctioned by the current government or if the group had sought permission to do so.

    Greenhouse gases: Greenhouse gases in the atmosphere hit a new record in 2018, exceeding the average yearly increase of the last decadeand reinforcing increasingly damaging weather patterns, the World Meteorological Organisation said on Monday (Nov 25).

     

    These insights are produced by The Straits Times, the official media partner for the Asia House Global Trade Dialogue, which took place in Singapore on 7 November 2019.

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