HONG KONG (Reuters) – Shares in Cathay Pacific Airways Ltd fell nearly 4% in early trade on Thursday following the resignation of its chairman after the market closed on the previous day.
The departure of John Slosar was announced less than three weeks after mounting Chinese regulatory scrutiny led to the shock exit of its chief executive, Rupert Hogg.
Cathay shares had closed 7.2% higher on Wednesday as the Hong Kong market was lifted by reports of the withdrawal of a controversial extradition bill, which was officially announced after the market closed.
Long-serving Swire Pacific Ltd executive Patrick Healy was appointed as Cathay’s new chairman on Wednesday following the resignation of Slosar, who had served in the role since 2014.
“As John would have retired soon anyway it’s not really a huge setback as a business,” an analyst said of Slosar’s departure. “However it’s always awful to see when politics dictate like this.”
The analyst, who was not authorised to speak publicly about personnel changes, said he believed if the political situation in Hong Kong stabilised, the situation at Cathay should as well.
Daiwa Capital Markets analyst Kelvin Lau said the extradition bill’s withdrawal was positive for Cathay, even though protests were not expected to end immediately.
“We expect this to be a turning point where the situation would at least not worsen,” he said in a note to clients, adding that recent personnel changes at the airline should satisfy the requirements of the Chinese regulator and were likely to instill confidence among customers.
China’s aviation regulator last month said crew who engaged in the anti-government protests in Hong Kong posed a threat to safety and should be suspended from staffing flights to the mainland and over its airspace.
(Reporting by Donny Kwok and Jamie Freed, writing by Jamie Freed, editing by Richard Pullin)
HONG KONG, Aug 25 (Reuters) – The Chinese territory of Macau elected former legislature head Ho Iat Seng as its leader on Sunday – the sole approved candidate.
Ho, who has deep ties to China, is expected to cement Beijing’s control over the special administrative region and distance it from protests in neighbouring Hong Kong.
He secured 392 votes from a 400-member pro-Beijing committee to lead the world’s largest gambling hub for at least the next five years, public broadcaster TDM reported.
The 62-year-old’s highly scripted appointment comes as the former Portuguese colony tries to position itself as a beacon of stability and model for the Chinese government’s “one country, two systems” formula through which Beijing administers Macau and Hong Kong.
Although anti-government protests have roiled the former British colony of Hong Kong for nearly three months, Macau has seen little dissent to Beijing’s rule.
Ho said local youth could resist the influence of Hong Kong’s protesters and support measures to boost patriotism in Macau.
(Reporting by Farah Master; Editing by Raju Gopalakrishnan)
SHANGHAI (Reuters) – German auto maker Daimler AG <DAIGn.DE> plans to build Mercedes Benz-branded heavy trucks in China by revamping truck plants owned by its local joint venture, according to a document seen by Reuters and two sources familiar with the matter.
The plan will deepen the alliance between Daimler and its Chinese truck JV partner, Beiqi Foton Co Ltd <600166.SS>, and comes after the purchase of a 5% stake in Daimler last month by its Mercedes Benz passenger car partner, Beijing Automotive Group Co Ltd (BAIC), Foton’s parent group.
“Localization of Mercedes Benz-branded trucks had been planned years before, so it has nothing to do with BAIC Group’s recent stake purchase in Daimler,” one source said.
In 2016, Daimler’s then head of its truck business told German media that it planned to make Mercedes Benz-branded Actros heavy trucks in China by the end of the decade. No details of the plan has since been reported or announced.
Under the plan, Beijing Foton Daimler Automotive (BFDA) will add Actros to its production lines which are mainly used to make Auman trucks, the joint venture’s sole truck brand, the sources said.
The JV plans to revamp its No.3 plant, which will have an annual capacity of 60,000 heavy trucks, and expand capacity at its No.2 plant to 100,000 units from 60,000 now, according to a document on the JV’s website. The value of the investment was not known.
The No.3 plant will build both Actros and Auman trucks, said the sources, who declined to be identified because the plan had not been made public.
Daimler’s office in China did not immediately respond to phone calls seeking comment. Foton declined to comment.
All Mercedes Benz trucks currently sold in China are imported and priced significantly higher than domestically made Auman trucks.
Founded in 2012, the truck joint venture sold just over 100,000 units in China last year. Daimler is seeking to further develop its truck business with Foton, but the lack of a solid supply chain in China remains an obstacle, the sources said.
“One of the biggest challenges is to build up a good local supply chain, as many heavy truck components for Mercedes Benz trucks cannot be locally sourced for now,” the second source said.
China’s heavy truck market has fared better than the overall auto market this year, thanks to a growing e-commerce industry and improvements in traffic and logistics infrastructure.
China sold 732,000 heavy trucks in the first seven months this year, down 1.4% from the same period a year earlier, while the overall auto market dropped 13.5%.
Other major heavy truck makers in China include FAW, Dongfeng and Sinotruk.
(Reporting by Yilei Sun and Brenda Goh in Shanghai; Editing by Miyoung Kim and Darren Schuettler)
While we are impatiently waiting for Tesla, Rivian, and others to bring their electric pickup trucks to market here in North America, China is already getting some.
Nissan is launching a new electric pickup truck through a Dongfeng joint venture in China: the Dongfeng Rich 6 EV.
With its aggressive zero-emission mandate, China has forced automakers to accelerate their deployment of all-electric vehicles in the country.
Several of them are now making EVs just for the Chinese market.
FILE PHOTO – The logo of Australian casino giant Crown Resorts Ltd adorns the hotel and casino complex in Melbourne, Australia, June 13, 2017. REUTERS/Jason Reed/File Picture
(Reuters)
– Wynn Resorts Ltd, the world’s No. 2 casino operator, said on Tuesday
it scrapped preliminary talks to acquire Crown Resorts Ltd for A$10
billion ($7.1 billion), after the Australian Financial Review broke news
of the negotiations.
Wynn’s
backtracking illustrates how media leaks of deal talks can test the
resolve of potential acquirers. Crown shares jumped as much as 22
percent on the news to A$14.37, close to the $A14.75 per share level
that Crown said Wynn’s latest cash-and-stock offer valued the company.
This
can make deal negotiations more difficult by emboldening acquisition
targets to drive a hard bargain, analysts said. In this case, Wynn’s
inexperience with pursuing big deals also likely played a factor, some
analysts added.
“(Wynn)
management’s experience with acquisitions is limited, so when you
target synergies it’ll be nice to have more of a track record for such a
large transaction,” said Roth Capital Partners analyst David Bain,
calling the termination of the deal talks a positive development for
Wynn.
After
the Australian Financial Review revealed Wynn’s takeover approach,
Crown not only confirmed the confidential talks on Tuesday, but also
disclosed the price that Wynn was offering. It added that Crown’s board
had not yet considered Wynn’s latest offer.
Wynn then issued two statements, first confirming the talks, and, a few hours later, stating that they had ended.
“Following
the premature disclosure of preliminary discussions, Wynn Resorts has
terminated all discussions with Crown Resorts concerning any
transaction,” the company said in a statement.
Wynn’s shares were down 3.2 percent at $140.21 in New York at mid-afternoon.
Examples
of companies confirming acquisition talks only to back out hours later
are few and far between, because they reflect a lack of conviction on
the part of the aspiring acquirers.
Last
year, drug maker Allergan Plc confirmed it was in the early stages of
making an offer for peer Shire Plc, after Reuters broke news of the
deliberations, only to issue a second statement a few hours later
stating it would not make an offer.
Insurer
Aon Plc said last month it would not pursue a merger with rival
insurance brokerage Willis Towers Watson Plc, a day after it confirmed
it was in early stages of considering an all-stock offer for the Irish
company following a Bloomberg News report revealing the deliberations.
HEDGE AGAINST MACAU
Wynn
was founded in 2002 by Steve Wynn, who started his casino business in
Las Vegas in the 1960s and created some of the city’s most iconic
landmarks – the Mirage, Bellagio and Treasure Island – before selling
them. Beset by sexual misconduct allegations, Wynn left the company and
sold his entire 11.8 percent stake in Wynn Resorts for $2.1 billion last
month.
Wynn
operates large resort-and-casino complexes in Las Vegas and Chinese
gambling hub Macau, with another under construction in Massachusetts.
The deal would have offered a hedge against Macau, where its licences
are up for renewal, by giving it two lavishly revamped Australian
casinos and a third being built on the prized Sydney harbour front.
Buying
Crown would also fit in with Wynn’s strategy to diversify
geographically to protect its growth prospects if its Macau licences are
not renewed.
The
company’s efforts so far have included ramping up promotion of a resort
in Japan, a market seen as the next potential goldmine to Macau and a
former expansion target for Crown.
“Wynn
has typically grown through building their own facilities, not through
acquisition,” said Bain, the Roth Capital Partners analyst.
For
Crown’s 47 percent owner James Packer, who re-badged his father’s media
empire as a gambling concern in 2007 only to withdraw from business
engagements last year due to mental illness, the deal would have ended
his career as a casino mogul with a A$4.7 billion payout.
He
would have ended up as Wynn’s biggest shareholder with 9.8 percent of
its shares, based on its current number of shares on issue.
“We
think Wynn’s strategy was mostly defensive, but if they have a strong
strategic rationale for wanting to acquire Crown, they would likely come
back to the table when things settle down,” said John DeCree, Union
Gaming Securities’ director of North America research.
(Reporting by Byron Kaye, Tom Westbrook and Paulina Duran in SYDNEY, Devika Syamnath and Nivedita Balu in BENGALURU, and Greg Roumeliotis in NEW YORK; Editing by Sriraj Kalluvila, Shounak Dasgupta and Richard Chang)
(Nattee Chalermtiragool/Shutterstock)
stock-Wynn-Macau-01-shutter
Macao, China – March 12, 2016: View of Macao city at night in Macao, China
Exclusive: China’s huge Airbus order padded by old or incomplete deals – source
PARIS
(Reuters) – A landmark order from China for 300 Airbus jets signed
during a state visit last week was bolstered by repeat announcements of
dozens of existing deals and advance approval for deals that have yet to
be struck, two people familiar with the matter said.
Echoing
an umbrella order for 300 Boeing jets awarded during a visit to Beijing
by U.S. President Donald Trump in 2017, the headline figure for the new
“framework order” for European jets was partly driven by political
considerations, the people said.
The
Airbus deal would have been worth some $35 billion at list prices but
the amount of new business is lower, they added. Duplicate announcements
included a deal for 10 A350 aircraft to an unnamed buyer, which
represents a repeat announcement of an order for 10 jets by Sichuan
Airlines at an air show last year.
The
disclosure takes some of the shine off an announcement widely regarded
as the economic highlight of a trip to Europe by Chinese President Xi
Jinping. Nonetheless the deal marked a return to the aircraft market by
China’s state buying agency after a pause of over a year during global
trade tensions.
The
overall figure of 300 was introduced late in the process and after Xi’s
visit was underway, although plane orders typically take months to
negotiate, one of the people said.
Airbus declined to comment on detailed orders but left open the possibility that the large total contained gaps.
The
agreement “creates the approval framework for aircraft ordered by
Chinese airlines, be it existing orders or future orders,” a spokesman
said.
TRADE TIES
Airbus
shares fell 0.7 percent on Tuesday, extending earlier losses after
Reuters reported gaps in the China deal. Airbus’ stock had risen almost
two percent after China’s mega-order, signed in Paris on March 25 in
front of Xi and French President Emmanuel Macron.
Industry
sources say major planemakers play by similar rules when selling to
China, where they face a two-tier system of negotiations with airlines
within a framework of state-backed umbrella deals that may be influenced
by geopolitics.
But
the headline figures for new orders during high-profile diplomatic
visits, which for several years hovered around 150 aircraft for both
Airbus and Boeing, have increased as trade ties between Washington and
China go through highs and lows.
In
November 2017, months before a trade war erupted with the imposition of
tariffs, China announced an order for 300 Boeing jets during a visit to
Beijing by U.S. President Donald Trump.
Analysts
expressed doubts at the time over how much of that was new business,
and said part of the announcement represented renewed government support
for deals already on Boeing’s books.
“The most recent Airbus and Boeing deals followed a similar pattern,” said a China aircraft industry specialist.
Boeing
is now seen as next in line to secure a 200-300-plane order as part of a
possible economic truce being negotiated to end the trade war, but the
recent grounding of one of its jets has cast uncertainty over the timing
of the deal.
Boeing
and Airbus compete fiercely to serve the needs of the world’s
fastest-growing airplane market, while bracing for future competition
from China’s own aerospace industry.
Analysts
say Beijing tends over time to balance U.S. and European purchases,
though recent years have seen the rise of a growing number of
independent Chinese leasing companies and an increase in autonomous
decision-making by several airlines.
(Reporting by Tim Hepher, Additional reporting by Marine Pennetier; Editing by Sudip Kar-Gupta and Richard Lough)
FILE
PHOTO: The Airbus logo is pictured at Airbus headquarters in Blagnac
near Toulouse, France, March 20, 2019. REUTERS/Regis Duvignau
PARIS (Reuters) – Airbus shares rose on Tuesday after the European planemaker won a deal worth tens of billions of dollars to sell 300 aircraft to China.
Airbus was up 2.7 percent by 1208 GMT, with the stock having risen nearly 40 percent so far in 2019.
French
officials said the deal was worth some 30 billion euros (25.6 billion
pounds) at catalogue prices. Planemakers usually grant significant
discounts.
The
Chinese order was announced late on Monday, coinciding with a visit to
Europe by Chinese President Xi Jinping and matching a China record held
by U.S. rival Boeing.
Investment bank Citigroup kept its “buy” rating on Airbus.
“We
do not have details of the delivery schedule of this order, but China
has been taking about 20-25 percent of Airbus production per year and
given the A320 family is sold out at announced production rates out to
2024/25, we believe this increases the probability of Airbus moving to a
production rate of 70 per month,” wrote Citigroup.
That positive view was echoed by Morgan Stanley, which kept an “overweight” rating on Airbus shares.
“Clearly
finalisation of this order is a positive for Airbus, and continues to
underpin strong order book coverage and rising production rates in
narrowbody,” Morgan Stanley said.
The
larger-than-expected order, which matches an order for 300 Boeing
planes when U.S. Donald Trump visited Beijing in 2017, follows a
year-long vacuum of purchases in which China failed to place significant
orders amid global trade tensions.
It
also comes as the grounding of the Boeing 737 MAX has left uncertainty
over Boeing’s immediate hopes for a major jet order as the result of any
warming of U.S.-China trade ties.
(Reporting by Sudip Kar-Gupta; Editing by Leigh Thomas and Jane Merriman)
SHANGHAI (Reuters) – China’s aviation regulator said on Monday it had ordered Chinese airlines to suspend their Boeing Co 737 MAX aircraft operations by 6 p.m. (5.00 a.m. ET) following a deadly crash of one of the planes in Ethiopia.
An Ethiopian Airlines 737 MAX 8 bound for Nairobi crashed minutes after take-off on Sunday, killing all 157 people on board.
It was the second crash of the 737 MAX, the latest version of Boeing’s workhorse narrowbody jet that first entered service in 2017.
In October, a 737 MAX 8 operated by Indonesian budget carrier Lion Air crashed 13 minutes after take-off from Jakarta on a domestic flight, killing all 189 passengers and crew on board.
The Civil Aviation Administration of China (CAAC) said in a statement it would notify airlines as to when they could resume flying the jets after contacting Boeing and the U.S. Federal Aviation Administration (FAA) to ensure flight safety.
“Given that two accidents both involved newly delivered Boeing 737-8 planes and happened during take-off phase, they have some degree of similarity,” the CAAC said, adding that the order was in line with its principle of zero-tolerance on safety harzards. The 737 MAX 8 is sometimes referred to as the 737-8.
The cause of the Indonesian crash is still being investigated. A preliminary report issued in November, before the cockpit voice recorder was recovered, focused on airline maintenance and training and the response of a Boeing anti-stall system to a recently replaced sensor but did not give a reason for the crash.
Chinese airlines have 96 737 MAX jets in service, the state company regulator said on Weibo.
Caijing, a Chinese state-run news outlet that covers finance and economics, said many flights scheduled to use 737 MAX planes would instead use the 737-800 models.
A Boeing spokesman declined to comment.
A U.S. official told Reuters the United States was unsure of what information China was acting on.
The U.S. official, speaking on condition of anonymity due to the sensitivity of the matter, said there were no plans to follow suit given the 737 MAX had a stellar safety record in the United States and there was a lack of information about the cause of the Ethiopian crash.
Western industry sources say China has been at pains in recent years to assert its independence as a safety regulator as it negotiates mutual safety standard recognition with regulators in the United States and Europe.
In 2017, it signed a mutual recognition deal with the FAA, but industry sources say it has struggled to gain approval from the FAA that would allow it to sell its C919 airliner to Western airlines.
SAFETY STANDARDS
According to flight tracking website FlightRadar24 there were no Boeing 737 MAX 8 planes flying over China as of 0043 GMT on Monday.
Most of Air China Ltd’s 737 MAX fleet of 15 jets landed on Sunday evening, with the exception of two that landed on Monday morning from international destinations, according to data on FlightRadar24.
It did not list any upcoming scheduled flights for the planes, nor did China Southern Airlines Co, which also has its fleet on the ground.
China Eastern Airlines Corp Ltd four 737 MAX jets landed on Sunday evening and no further flights were scheduled until Tuesday, FlightRadar24 data showed.
Cayman Airways has grounded both of its new 737 MAX 8 jets until more information was received, the Cayman Islands airline said in a statement on its website.
Fiji Airways said it had followed a comprehensive induction process for its new Boeing 737 MAX 8 aircraft and it had full confidence in the airworthiness of its fleet.
“We continue to ensure that our maintenance and training program for pilots and engineers meets the highest safety standards,” the airline said.
Singapore Airlines Ltd, whose regional arm SilkAir operates the 737 MAX, said it was monitoring the situation closely, but its planes continued to operate as scheduled.
Indonesia said it would continue to monitor its airlines operating the 737 MAX, which include Lion Air and Garuda Indonesia but it did not mention any plan to ground the planes.
(Reporting by Josh Horwitz and John Ruwitch; additional reporting by Brenda Goh in Shanghai, Stella Qiu in Beijing, David Shepardson in Washington, Tom Westbrook in Sydney, Jamie Freed in Singapore; Edward Davies in Jakarta and Tim Hepher in Paris; Editing by Richard Pullin, Robert Birsel)
HONG
KONG, Feb 18 (Reuters) – Police in the world’s biggest gambling hub of
Macau are investigating what they suspect is a rare murder in a
five-star casino resort after a Chinese man was found stabbed in his
bed, broadcaster TDM reported on Monday.
Murder
cases have been rare in the Chinese territory since Portugal ceded
control of what had been a colonial backwater on the heel of China’s
southern coast 20 years ago.
The
suspected murder took place in Sands China’s Conrad Macau hotel, TDM
reported, citing police. It comes as slower mainland growth, a weaker
yuan and a simmering trade war with the United States threaten to derail
Macau’s growth.
The
41-year-old victim, an active gambler from the mainland, had been
stabbed. The case was being investigated and no further details were
available, TDM said.
Macau
police and Sands China did not respond to requests for comment. The
company is controlled by U.S. billionaire Sheldon Adelson’s Las Vegas
Sands.
Macau
is the only place in China where casino gambling is legal. Casino
revenues shrank in January for the first time in more than two years.
Violent
crime in Macau has often been linked to its junket operators – the
middlemen who bring China’s wealthiest to the gambling tables. Slower
growth and tighter regulations have made it hard for many small junket
companies to stay in business.
Criminal
gangs known as triads, which are known to operate in Macau, are
typically involved in extortion, money laundering, murder and
prostitution.
(Reporting by Farah Master Editing by Robert Birsel)
DUBAI/BEIJING, Jan 2 (Reuters) – Qatar Airways has acquired a 5 percent stake in China Southern Airlines, the state-owned Gulf carrier said on Wednesday, in a move to gain access to the fast-growing mainland Chinese market.
Qatar Airways also owns a 20 percent stake in British Airways-parent International Consolidated Airlines Group, 10 percent of South America’s LATAM Airlines Group SA , 49 percent of Italy’s Meridiana and 9.99 percent stake in Hong Kong’s Cathay Pacific.
Qatar’s flagship airline has sought new partners and routes after it was blocked last year from flying to the lucrative markets of Saudi Arabia and the United Arab Emirates because of restrictions imposed by those countries.
Saudi Arabia, UAE, Bahrain and Egypt, imposed a political and economic boycott on Qatar since June 2017, accusing it of supporting terrorism, which Doha denies.
China Southern in a separate statement said Qatar Airways may consider increasing its stake in the airline in the next 12 months. Qatar had no previous investment in the Chinese airline.
Qatar Airways is the second foreign carrier that has a stake in China Southern, after American Airlines. The Chinese carrier left the Skyteam airline alliance at the start of the year.
There are opportunities for “us to work together and build a long term relationship in ways that would bring benefits to customers of both airlines,” said Qatar Airways’ Chief Executive Akbar al-Baker.
Ajith K, director of Asia transport at UOB Kay Hian, said given that China Southern is the biggest competitor of Cathay Pacific in Greater China, this deal could strengthen the China Southern’s position at the Hong-Kong carrier’s expense. “Why Qatar is doing this, seems to me, one of course is to gain access to the Chinese market. Secondly it’s probably that they are hedging against their bet given they own almost 10 percent in Cathay Pacific.”
(Reporting by Asma Alsharif and Saeed Azhar in Dubai and Stella Qiu in Beijing; editing by Louise Heavens)
