Good morning! Here’s what you need to know in markets on Tuesday.
1. Chinese ride-sharing firm Didi Chuxing is considering a $US6 billion (£4.7 billion) investment backed by Japan’s SoftBank Group, as it looks to take on global rivals such as Uber Technologies, Bloomberg reported on Tuesday citing sources familiar with the matter. Didi, backed by global tech giants Apple and Tencent Holdings, is facing regulatory challenges at home over its drivers even as it looks to diversify from its core ride-hailing business to find new drivers for growth.
2. Two of Tesco’s largest shareholders have chastised the supermarket for its “foolhardy” £3.7 billion merger with wholesaler Booker, arguing the deal would destroy billions of pounds worth of value. The Telegraph reports that Schroders, the grocer’s third biggest investor, and Artisan Partners, the fourth largest, have written to Tesco’s board to urge the company to abandon its tie-up with Booker, throwing the deal into doubt.
3. The Dow Jones industrial average closed in negative territory for the eighth day in a row on Monday, the first such losing streak since the European debt crisis was at its peak. According to Bespoke Investment Group, this is the first eight-day sell-off in the US since August 2011, when the world was concerned about the creditworthiness of some of the largest economies in Europe.
4. Asian stock markets are higher. Japan’s Nikkei is up 1.02% at the time of writing (6.35 a.m. BST/1.25 a.m. ET), the Hong Kong Hang Seng is up 0.69%, but China’s Shanghai Composite is down 0.43%.
5. Credit Suisse will make a decision on its capital raising plans “as soon as possible,” its chief executive said on Tuesday, without giving specific details on the timing or the type of fund-raising. Reuters reports that the bank upped its net loss for last year to 2.71 billion Swiss francs (£2.2 billion, $US2.75 billion) from 2.44 billion. This cut its common equity tier 1 ratio, a measure of balance-sheet strength, heightening its need to raise capital.
6. The second big US enterprise tech IPO of the year, Okta, has released a price range for the 11 million shares it plans to soon sell on the public market: $US13-$US15 per share. If the offering ends up at the midpoint of that range, the company will raise nearly $US160 million (£127.3 million) and be valued at about $US2 billion (£1.6 billion).
7. Chinese tech giant Tencent Holdings has signed a $US4.65 billion (£3.7 billion) loan deal, Basis Point reported, amid a flurry of fund-raising by China’s internet giants. Tencent, which had an original target of about $US2 billion (£1.6 billion) for the loan, inked the deal on March 24 following commitments from a dozen banks, Thomson Reuters publication Basis Point reported, citing sources.
8. Acquisitive Chinese conglomerate HNA Group is in talks to buy a controlling stake in the owner of the publisher of Forbes magazine, two sources with knowledge of the matter told Reuters. Hong Kong-based investor group Integrated Whale Media Investments (IWM), which holds 95% of Forbes Media, is also in talks with another Chinese media firm and is scouting for more potential buyers for most or all of its stake, said one of the sources, who declined to be identified as the talks are confidential.
9. China Southern Airlines said on Tuesday it would issue HK$1.55 billion (£158.8 million, $US199.6 million) worth of shares to a subsidiary of American Airlines Group, giving the US airline a stake in China’s largest carrier. The deal would make American Airlines the second US carrier to own part of a Chinese airline after Delta Air Lines bought 3.55% of China Eastern Airlines for $US450 million (£358 million) in 2015.
10. Wall Street is starting to worry about the US auto loan market. Fitch, Moody’s, Morgan Stanley, Mizuho and Evercore ISI have all published research on the market in the past few days, and there’s a recurring theme: It’s not looking good. There could be wide-ranging consequences, with automakers, the US economy, consumers and one corner of the bond market all potentially taking a hit.
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