Google today threatened to remove its search engine from Australia over the nation’s attempt to make tech companies pay for news content. The Hong Kong stock index pushed past 30,000 points off the back of record Mainland inflows this week, powering the city’s fastest rally in more than three decades. Despite disruptions caused by the pandemic, China saw a record high in FDI since the 1980s.
MAJOR HEADLINES IN ASIA
This section tracks major political, economic and business news from the key economies in Asia.
As Australia is introducing a landmark law to make Google, Facebook, and potentially other tech companies pay media outlets for their news content, Google has threatened to remove its search engine from the country. The internet giant told a Senate hearing that the laws were “unworkable”. Australian politicians are scheduled to debate the laws in parliament this year.
According to the Singapore Economic Development Board's latest annual year-in-review, business investment commitments into Singapore rose 13% last year to their highest in more than a decade, helped by sectors such as semiconductors, energy and chemicals even as the city-state suffered its worst recession from the pandemic.
Japan's Financial Services Agency will urge banks and companies to accelerate decarbonisation by adding climate change measures to its bank guidance policy favouring companies that want to invest in renewable energy. The Agency will also support companies that want to reduce emissions by asking banks to provide support through advice and funding.
Foreign direct investment into China increased to a record high in 2020 despite the disruptions caused by the Covid-19 pandemic. Investment, excluding that in financial sectors, grew to US$144.37 billion last year, the highest since records began in 1983.
Many Chinese private banks are offering much higher yields than the central bank’s benchmark interest rate to attract more savings after regulators cracked down on the leveraging of online financial services provided by internet giants such as Ant and Tencent Holdings.
EQUITY AND DEBT CAPITAL MARKETS
This section highlights the biggest ECM and DCM developments in China and Hong Kong which are moving markets and grabbing headlines.
Hong Kong-listed China Longyuan Power Group Corp, the country's biggest publicly traded windfarm operator, is seeking to go public on the Shenzhen Stock Exchange through a backdoor listing using loss-making Inner Mongolia Pingzhuang Energy Resources Co. Ltd. as a shell.
China Evergrande Group's shares surged nearly 17% after the company announced its early repayment of a US$2 billion bond which helped ease investor concerns about leverage at the world's most indebted property developer.
Hong Kong stocks are trading at their highest level since May 2019 as mainland investors continue a record spending spree in the city. Signs suggest that mainland buying will continue, with investors shifting out of A shares to buy those listed in Hong Kong, said Bloomberg.
Chinese search engine giant Baidu is planning to file for its Hong Kong secondary listing after the Lunar New Year, which could raise at least US$3.5 billion.
PE/VC DEAL ACTIVITY
This section tracks the fundraising, deals and other activities conducted by the PE/VC funds in Asia.
CHINA AND HONG KONG
Hong Kong-based healthcare-focused PE investor Lake Bleu Capital has raised US$560 million for a pre-IPO fund targeting Asia with an emphasis on China.
Tencent Holdings and Trustbridge Partners have led a US$100 million Series C funding round for Jiliguala, a Shanghai-based online English learning platform.
Chinese mapping start-up Wayz.ai has raised US$40 million in an extended Series A round from a range of local investors, including Pudong Science & Technology Investment, Zhangjiang Group, and Shanghai Zhangjiang Hi-Tech Part Development.
JAPAN AND KOREA
Kyoto Fusioneering, a Japanese engineering start-up developing equipment for the fusion reactor industry, has raised US$1.1 million from Coral Capital, individual investors, and founding members through a third-party allotment, bringing the company's total funding raised so far to US$3.3 million.
Singapore-based start-up Volopay, which aims to build a "financial control center" for businesses, has raised US$2.1 million in seed funding. The round was led by Tinder co-founder Justin Mateen, and included participation from Soma Capital, CP Ventures, Y Combinator, VentureSouq, the founders of Razorpay, Antler, and other angel investors.
Singapore-based digital exchange Istox has concluded a US$50 million series A round, bringing on board four new investors, including VC arm of Japanese sovereign investor Japan Investment Corporation and the Development Bank of Japan.
Navis Capital Partners has made an investment of undisclosed size in Moneythor, a Singapore financial technology supplier that focuses on digital banking.
This section highlights the major regulations, policy changes and political developments in China and Hong Kong that have implications for the business environment.
China's new rules for vetting foreign investments on national security grounds came into effect on Monday. Under the new regulation, which was formally announced last month, foreign investments in a wide range of industries including energy, equipment manufacturing, infrastructure, transport, IT, internet products, financial services, and tech, are subject to review.
China’s central bank has released a draft for comments of regulations aimed at strengthening anti-monopoly supervision of payment services by non-bank institutions. The bank has outlined its definitions of monopoly and the scope of the relevant market for the first time, as it moves ahead with a plan to curb the market concentration in the world’s largest fintech market.
To attract more private equity funds to the city, the Hong Kong government proposed that eligible carried interest will be charged at a profits tax rate of 0% and that 100% of eligible carried interest will be excluded from employment income for the calculation of salaries tax. An amendment bill is expected to be passed early next month.
ONE FOR THE WEEKEND
Each week we will select one or two articles which have caught our attention – long reads, institutional outlooks, analysis or interesting viewpoints
As the global community expects economic and political turbulence to continue, resilience has become more important for companies in all sectors. Bain & Company executives challenge businesses to rethink some common myths on business resilience in its recent brief.
THE WEEK AHEAD
All eyes on Washington as the new administration settles in for its first full week of work in the White House. Over in Asia, we are expecting fourth-quarter GDP performance figures from Taiwan, Hong Kong, Korea, and the Philippines. Taiwan is likely to stay in the positive territory, but the other three nations may be looking at higher levels of unemployment and contraction.
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