80.20 +0.55 (0.69%)
Pre-Market: 7:15AM EST
|Bid||80.03 x 800|
|Ask||80.26 x 1100|
|Day's Range||79.02 - 79.80|
|52 Week Range||64.55 - 102.70|
|Beta (3Y Monthly)||0.84|
|PE Ratio (TTM)||16.89|
|Forward Dividend & Yield||2.01 (2.54%)|
|1y Target Est||98.60|
Shares in AB InBev tumbled as much as ten percent Friday (October 25). That after the world's largest brewer cut profit growth forecasts for the year. It says drinkers in Brazil and South Korea turned away from its beers in a weak third quarter. The maker of Budweiser, Corona and Stella Artois had previously forecast strong growth in core profits. Now it says that growth will be only 'moderate'. The Belgium-based company's third quarter profit was unchanged year-on-year at just under 5.3 billion dollars. Economic uncertainty in countries around the world has hit its strategy of pushing consumer towards more expensive beers. In South Korea AB InBev had to reverse price increases after rivals failed to follow suit. In Brazil it saw beer volumes drop three percent as competitors shipped their drink to consumers at a discount. On Friday the firm's big share slide contributed to a down morning for European equities.
(Bloomberg) -- In the four years since it was founded, Convoy Inc. has assembled a lineup of big-name investors that includes Bill Gates, Jeff Bezos and Marc Benioff. It’s adding one more to the list: Al Gore.The former U.S. vice president’s sustainability-focused investing fund, Generation Investment Management LLP, led a $400 million funding round for Convoy, which makes software to connect freight shippers with truck drivers. T. Rowe Price Group Inc. co-led the investment with Gore’s firm, Convoy said Wednesday. The deal values the startup at $2.75 billion.Convoy is often described as “Uber for trucking”—a moniker that took hold before Uber Technologies Inc. set up a competing business. Uber has committed to hire 2,000 people to expand freight operations in Chicago. Another rival business in the United Arab Emirates, Trukker, said Tuesday it received a $23 million investment led by a Saudi Arabian venture capital fund.A big part of Convoy’s pitch is that it can improve the trucking business by making it more efficient, both financially and environmentally. Transportation is the largest source of U.S. emissions today, and heavy-duty trucks represent about 13% of those emissions. Convoy’s service is designed to eliminate unnecessary driving by ensuring trucks can get loads on each trip. The business isn’t yet profitable, but Dan Lewis, the chief executive officer, has said it will be eventually.Customers include Procter & Gamble Co. and Anheuser-Busch InBev NV. Among the investors in the new funding round are Alphabet Inc.’s CapitalG, Baillie Gifford, Durable Capital Partners, Fidelity Investments and Lone Pine Capital. The new funds are expected to help the company accelerate its expansion and fend off competition from upstarts, as well as the likes of J.B. Hunt Transport Services Inc.\--With assistance from Dina Bass and Thomas Black.To contact the reporter on this story: Emily Chasan in New York at email@example.comTo contact the editors responsible for this story: Mark Milian at firstname.lastname@example.org, Anne VanderMeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
AB InBev (BUD) agrees to buy the remaining stake in Craft Brew for $16.50 per share. The buyout is likely to strengthen AB InBev's position in the craft beer space.
BOSTON, Nov. 12, 2019 -- Block & Leviton LLP (www.blockesq.com), a securities litigation firm representing investors and whistleblowers nationwide, informs investors that.
Chegg, C.H. Robinson Worldwide, Tilray, Anheuser-Busch InBev and Novartis highlighted as Zacks Bull and Bear of the Day
U.S. stock indexes hit new highs amid U.S.-China trade war progress. Quarterly earnings results, including Uber. The episode then closes with a look at why The Boston Beer Company (SAM) is a Zacks Rank 1 (Strong Buy) stock...
(Bloomberg) -- The biggest dealmaker in Japan this year has one thing on his mind: beer, and then more beer -- more than $20 billion of it in the past four years.Never mind that people around the globe are drinking less, with consumption expected to show little to no growth in the coming years, or that other brewers are trying to diversify out of the market. Asahi Group Holdings Ltd. Chief Executive Officer Akiyoshi Koji is doubling down on beer as a survival strategy.“We are expanding with the goal of being No. 1 for the premium beer segment in every geographic area we’re doing business,” Koji, 67, said in an interview. “The world is our market.” The CEO’s other obsession is to make Super Dry, which debuted in the late 80s and helped turn Asahi into Japan’s top brewer, into a global beer brand.While other big brewers are moving into high-growth regions such as China and Southeast Asia, or exploring potentially lucrative businesses like cannabis-related products, Asahi has been in acquisition mode for beer in all corners of the globe, most recently in Europe and Australia.Koji has been the driving force behind more than $20 billion in acquisitions -- including his biggest-ever deal in July, the $11 billion purchase of Melbourne-based brewer Carlton & United Breweries -- in the past four years. The deals have almost doubled Asahi’s value and vaulted it into the top ranks of the world’s biggest beer makers in less than five years.The buying spree has sparked skepticism from analysts. In two of its deals with Anheuser-Busch InBev NV -- central and eastern European assets in 2017 and Australian labels including Victoria Bitter earlier this year -- it paid about 15 times Ebitda, according to Bloomberg calculations. The median for nine brewery acquisitions announced worldwide in the past five years is only 10 times Ebitda.Koji, who joined Asahi 44 years ago as a rank-and-file salaryman, often cites Heineken NV as the kind of global brewer Asahi aspires to be. But Heineken pushed into global markets decades ago, when appetite was growing for imported and exotic beers. Now, younger drinkers are choosing local craft brews and lower-calorie drinks, or even opting for cannabis-infused beverages for relaxation with no hangovers. That’s why Euromonitor predicts that beer consumption volume will grow only around 1.4% annually on average in the next five years.“The vast majority of mature markets are reaching the limits of growth potential,” said Spiros Malandrakis, head of research for alcoholic drinks at Euromonitor. “I think the era of global mega brands that can maintain brand equity across long periods of time will die with the millennial generation.”Koji says that the premium segment — higher-priced beers — still has room to grow compared with the broader industry. Consolidation is the only way to expand in a mature global beer industry, he argued, noting that what Asahi paid for Carlton & United “was not that expensive” given population growth on the continent.One reason why Asahi has been able to snap up so many storied beer brands is the CEO’s willingness to make quick decisions. He’s also built up rapport with AB InBev chief Carlos Brito, who has been selling off assets to pay down debt.Koji first asked to buy the Australian brands in a meeting earlier this year, but Brito didn’t commit at the time, as the Belgian brewer was preparing a mega-IPO of its Asian operations. When that plan fell apart in July, Koji spied an opening and immediately contacted Brito. After a weekend and a week of meetings and nightly calls, they finalized a deal that stunned markets, as well as AB InBev’s own bankers.Despite the dramatic dealmaking, Koji remains fairly low-key. His meal of choice before important meetings is “shogayaki,” a pork-and-ginger stir fry found in cafeterias for less than $10. But his bold moves have raised eyebrows in Japan’s staid corporate world.“Someone who’s making these very, very big decisions for acquisitions is certainly not standard for Japan Inc.,” said Christina Ahmadjian, a business professor at Hitotsubashi University who is an outside director on Asahi’s board.Asahi took on a 1.2 trillion yen bridge loan and issued 200 billion yen worth of shares to pay for the suite of Australian brands. The Japanese brewer, which was already on the hook for about 1 trillion yen in interest-bearing debt, is hoping that cash from that newly-acquired business will help pay down liabilities.The company is also facing pressure in its home market, where higher margins generates a steady cash flow it relies on. Rival Kirin Holdings Co. has been seeking to unseat the market leader by putting out inventive brews with a premium twist and offering craft beers. “The domestic business needs a fundamental rethink if they’re really going to deliver value,” said Euan McLeish, an analyst at Sanford C. Bernstein & Co.Koji contends that Asahi can grow at home and abroad. Its focus in Japan is to improve profitability, rather than try to boost consumption in a country where a declining population translates into fewer drinkers.He seems untroubled by the doubters and investors are so far rewarding his resolve. Asahi shares are up 27% this year, compared to a 12% gain in the TOPIX.“He’s very stoic,” UBS Securities analyst Satsuki Kawasaki said. “He’s taken on the CEO position with the conviction that he will exit if he doesn’t produce results.”To contact the reporters on this story: Lisa Du in Tokyo at email@example.com;Grace Huang in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Rachel Chang at email@example.com, Reed StevensonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Alibaba Group Holding Ltd. is deciding between launching a sharply reduced $10 billion Hong Kong share sale in November or delaying the deal till next year as global uncertainty mounts, people familiar with the matter say.China’s largest company is weighing its options for the city’s biggest first-time sale of stock since 2010, but the window for pulling off its mega deal in 2019 is closing fast. It can proceed with a required listing hearing -- either after its Nov. 1 earnings or Nov. 11 Singles’ Day shopping gala -- or risk postponing a deal altogether till 2020, people familiar with the matter say. Alibaba is reluctant to drag things out as uncertainty mounts around U.S.-Chinese tensions and the global macroeconomic outlook, they added, asking not to be identified talking about a sensitive matter.Alibaba’s listing was to be the crowning achievement of a Hong Kong stock exchange that lost many of China’s brightest technology stars to U.S. rivals. Instead, pro-democracy and anti-China protests erupted over the summer, rattling the financial hub and hammering mainland-related stocks. Billionaire Alibaba co-founder Jack Ma’s dream of listing closer to home -- a move that would have curried favor with Beijing and hedged against trade war risks -- risks back-firing without an offering.The company is now considering the week after its quarterly earnings release or the country’s largest online retail bonanza as the most likely openings, the people said. Alibaba’s looking to raising closer to $10 billion, about half of an original target, the people said. The company can capitalize on the strong recent reception for Hong Kong IPOs, with several companies including Anheuser-Busch InBev NV’s Asian unit raising $1 billion or more. Alibaba declined to comment in an email.It “is closer to home, and people are more familiar with its business here, so it could get a good valuation if it listed in Hong Kong,” said Julia Pan, a Shanghai-based analyst with UOB Kay Hian.Read more: Pitting Tencent Against Alibaba Could’ve Made 29% This YearAny decision however will hinge on investors’ reaction to its results, which are expected to underscore the e-commerce juggernaut’s slowest pace of revenue growth in about three years.Alibaba has already handed in all its documents and made a confidential filing. Informal feedback from investors show there’s keen interest, but Alibaba is in no rush to kick off the offering as political considerations take the upper hand now, the people said. One wrinkle: the local exchange requires companies to list within six months of filing, or reapply. The online emporium is said to have picked China International Capital Corp. and Credit Suisse Group AG as lead banks.A successful Hong Kong share sale could help finance a costly war of subsidies with Meituan Dianping in food delivery and travel, and divert investor cash from rivals like Meituan and WeChat-operator Tencent Holdings Ltd. It could put the capital to work investing in new technologies such as artificial intelligence or fast-expanding affiliates such as Ant Financial. Courting investors closer to home also serves as a buffer of sorts should U.S.-Chinese tensions worsen. Already, U.S. lawmakers such as Senator Marco Rubio are agitating for measures to curb investment flows to Chinese companies, including the extreme option of tossing U.S.-listed firms off American bourses.“Alibaba could use Hong Kong as a plan B for capital markets, and also deploy the capital to areas that need cash like cloud, Ant Financial and AI,” Pan said.Read more: White House Weighs Limits on U.S. Portfolio Flows Into ChinaBut should the company decide to plough ahead, it will likely have to contend with difficult questions from would-be investors.Alibaba -- which had roughly $57 billion of cash and equivalents as of June -- rode a national e-commerce boom that stemmed from an increasingly affluent middle class. But like arch-foe Tencent, it’s struggling to sustain growth as the world’s No. 2 economy slows, and China clashes with the U.S. over everything from trade and technology to investment.At home, signs of strain are growing. China’s gross domestic product growth is expected to slump below 6%, which would be the economy’s slowest pace of expansion in three decades. Alibaba is projected to post revenue growth of 37% in the September quarter.(Updates with analyst’s comment from the fifth paragraph)To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at firstname.lastname@example.org;Manuel Baigorri in Hong Kong at email@example.com;Carol Zhong in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, ;Fion Li at firstname.lastname@example.org, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Today, we'll introduce the concept of the P/E ratio for those who are learning about investing. We'll show how you can...
Canopy Growth has rolled out its first batch of cannabis drinks and chocolates, with products ranging from psychoactive ginger ale, to a CBD-infused sparkling water, to cacao medallions.
(Bloomberg) -- Hong Kong’s IPO market is making a huge comeback.Defying the intensifying protests that have hurt the city’s economy from trade to tourism, Hong Kong’s has led the world in initial public offerings since the start of September.The total value of first-time share sales at the Hong Kong stock exchange since Sept. 1 is $7.9 billion, overshadowing Nasdaq Inc.’s $7 billion and $3 billion at the New York stock exchange, according to data compiled by Bloomberg. Anheuser-Busch InBev NV’s $5.8 billion IPO of its Asian unit and another billion-dollar-plus deal contributed to the lead held by the Asian financial center.“The market has been volatile and challenging this year but we are now in a good window for IPOs in Hong Kong, ” said Alex Abagian, co-head of Asia Pacific equity capital markets at Morgan Stanley. “We are seeing a significant amount of quality capital being deployed towards good assets, primarily companies that are market leaders in their sector.”While summers are typically quiet for first-time share sales in Hong Kong as bankers and investors go on holidays, the escalation of the pro-democracy protests and the trade war between China and the U.S. damped companies’ enthusiasm further this year. The total raised in IPOs plunged to $1.5 billion for the July-August period from $11.6 billion a year earlier, which was the busiest summer on record with listings of China Tower Corp. and Xiaomi Corp..Sentiment in Hong Kong’s primary market turned around as AB InBev revived its IPO plan for Budweiser Brewing Company APAC Ltd. last month. The world’s second-largest offering this year attracted Singapore’s sovereign fund GIC Pte Ltd., which committed $1 billion. The sale was priced at the bottom of the marketed range and AB InBev partially exercised a right to increase the number of shares sold. Two weeks later, Chinese sportswear retailer Topsports International Holdings Ltd. priced its $1 billion initial share sale.ESR Cayman Ltd., a logistics real-estate developer, is set to raise $1.6 billion as it’s expected to price its IPO at the middle of a marketed range, people familiar with the matter have said. That deal could be the second-largest transaction in the territory. China Feihe Ltd., a baby formula producer, started taking investor orders on Monday for its proposed IPO of up to $1.14 billion.The rejuvenated momentum is also evident among the retail investors in the city. Some small-cap IPOs saw heavy over-subscriptions and frenzied trading in their debuts. Ascentage Pharma Group International attracted orders for 752 times its initial retail tranche this week, while shares of software developer 360 Ludashi Holdings Ltd. more than tripled on Oct. 10 on its first day of trading.Elsewhere, WeWork called off one of the year’s most hotly anticipated IPOs in New York last month. In Australia, Latitude Financial Group Ltd. shelved what would have been the country’s biggest share sale this year, citing worries about how the company would trade on its debut. That was followed by PropertyGuru Ltd.’s IPO withdrawal.For the year, Hong Kong’s bourse could still come in third or even fourth in first-time share sales, trailing the exchanges in New York and Shanghai. So far in 2019, the city’s IPO volumes have dropped 43% from a year earlier to $18.6 billion, data compiled by Bloomberg show. The buoyancy also didn’t work for everyone. Household appliance maker JS Global Lifestyle Co. shelved its Hong Kong IPO over the weekend, according to people familiar with the matter.The city could still experience a late flurry, keeping bankers busy, Morgan Stanley’s Abagian said.“On the back of the recent pick-up in activity, we remain reasonably optimistic for the rest of the year, with the coming five to six weeks expected to be busy in terms of IPOs and block trades,” he said.(Updates with details of Feihe’s IPO in seventh paragraph)\--With assistance from Zhen Hao Toh, Linus Chua and Stanley James.To contact the reporter on this story: Carol Zhong in Hong Kong at email@example.comTo contact the editors responsible for this story: Fion Li at firstname.lastname@example.org, Ville HeiskanenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
AB InBev's (BUD) earnings and sales lag estimates in third-quarter 2019 on soft revenue per hl, higher cost of sales, and year-over-year phasing of sales and marketing investments.
(Bloomberg) -- The Asian business that Anheuser-Busch InBev NV separated last month with the promise of tapping into China’s growth is now weighing on performance of the world’s largest brewer.The Budweiser maker’s shares fell as much as 11% in European trading, lopping off more than $20 billion of market value, after profit growth stumbled in the third quarter. The company cited a drop in beer shipments in China, the U.S. and Brazil and said it expects “moderate” full-year earnings gains, down from “strong” previously.Ambev SA, the brewer’s unit for Central and South America, the Caribbean and Canada, fell as much as 7% in Sao Paulo trading, the largest intraday drop in a year, after reporting sales below analyst estimates.The results paint a souring picture of Asian consumer confidence and could signal bigger trouble ahead after China’s economy slowed to the weakest pace since the 1990s. Chief Executive Officer Carlos Brito has reported earnings below analysts’ estimates in four of the past eight quarters. Last year he cut the brewer’s dividend payout in half amid sluggish progress in debt reduction following the acquisition of SABMiller in 2016.AB InBev’s report underlines a recent pattern, with Chinese demand weakening for drinks like Pernod Ricard SA’s Cognac and mass-market consumer items from Nestle SA and Unilever, while fashion giants Hermes International, LVMH and Kering are still enjoying strong growth in the world’s key luxury market.The brewer’s earnings were flat on an adjusted basis, missing analysts’ estimates for 3% growth.“We had anticipated that this quarter would be a tough quarter, but I think people are reacting to the fact that there were additional things,” Brito said by phone, referring to especially weak performance in Brazil and South Korea.In China, new restrictions curbing the sale of alcoholic drinks after 2 a.m. have weighed on the industry. AB InBev’s earnings growth in that market slowed to 11% from 24% in the second quarter. Last month, the company raised $5.8 billion selling a stake in its Asian business, Budweiser Brewing Company APAC Ltd.AB InBev said prospects in China remain good because its highest-priced beers, which include Corona, had shipment growth exceeding 10%. AB InBev dominates that segment of the country’s market, which generates far higher earnings than low-end labels.Top BrandsAB InBev has also started selling new products such as non-alcoholic Harbin 0.0 and Harbin Crystal Ice in an effort to reinvigorate local brands. In 2017, it acquired Boxing Cat, a craft brewer based in Shanghai.“Our China business remains intact,” Chief Financial Officer Felipe Dutra said on a call with reporters. “Growth is there.”What Bloomberg Intelligence Says:“AB InBev’s volume collapse shows the inherent risk of its business model, with a focus on higher prices and margin allowing competition a chance to flourish.”\-- Duncan Fox, BI consumer-staples analystAB InBev Asian Volume Collapse a Concern If M&A a Goal: ReactLast year, Heineken NV bought a $3.1 billion stake in the parent of China Resources Beer Holdings Co., the maker of the country’s best-selling Snow brand. Carlsberg A/S has also been performing well in China, where its revenue rose 19% in the first half even as the overall market shrank.In the U.S., the emergence of hard seltzers is eroding consumption of beer, so the company is expanding in that segment with brands such as Bon & Viv and an upcoming Bud Light Seltzer.Other factors that hit the brewer in the quarter were higher raw-material costs, the timing of shipments, adverse currency swings and volume declines in South Korea and Brazil. The brewer reversed price increases in the Asian country after they drove consumers away. Earnings in Brazil dropped 17%.More ChallengesAB InBev said that the second half of 2019 poses more challenging comparisons. Last year, most marketing spending occurred in the first half, linked to the World Cup soccer games, while this year it’s more spread out.The shares trade at a significant discount to those of leading consumer-goods companies such as Procter & Gamble Co., Coca-Cola Co. and Diageo Plc, and the third-quarter results illustrate why, Evercore ISI analyst Robert Ottenstein said in a note.While there are bright spots in the report, “there are not enough to offset headwinds in Brazil, the U.S. and possibly continuing in China,” he said.(Updates with Ambev shares drop in second paragraph)\--With assistance from John Bowker and Fabiola Moura.To contact the reporter on this story: Thomas Buckley in London at email@example.comTo contact the editor responsible for this story: Eric Pfanner at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The investigations unit of India's Competition Commission has concluded that Anheuser-Busch InBev , Carlsberg and United Breweries colluded to fix beer prices, two people with direct knowledge told Reuters. The Competition Commission of India (CCI) launched the investigation after AB InBev told the watchdog it had detected an industry cartel, leading in 2018 to dawn raids at the three brewers' offices to collect evidence.
(Bloomberg Opinion) -- After a frenzy of activity over the past year, Anheuser-Busch InBev NV is still on the wrong side of the beer mat.On Friday, the world’s biggest brewer reported that earnings growth stalled in the third quarter, especially hit by new sales restrictions on alcoholic drinks in China.The company downgraded its forecast for expansion in full-year earnings before interest, tax, depreciation and amortization to moderate. Previously it had expected this to be strong. The shares fell as much as 11%.The caution on earnings at the King of Beers is particularly worrying. An acquisition machine, AB InBev’s strength has always been in its ability to raise prices and grind out costs to fatten margins.It’s increasingly clear that the brewer of Budweiser and Michelob beers needs to do more deals to turbocharge growth and merit its crown. Yet it’s in a bind. It doesn’t have much leeway to make a sizeable deal that would make a big difference.AB InBev has made valiant efforts over the past year to strengthen its balance sheet. In the last 12 months it has halved its dividend, raised gross proceeds of $5.75 billion from listing its Asia Pacific unit and another $11.3 billion from selling its Australian arm to Japan’s Asahi Group Holdings Ltd.These actions together imply a cut in net debt to at least $86.9 billion at the end of 2019. Second-half cash flow – which is typically stronger than in the first six months of the year – should reduce this figure even further. AB InBev said net debt would be less than four times EBITDA at the end of 2019, a year earlier than the company’s previous guidance.While this is better than the 4.6 times at the end of 2018, it is still well above the 3 times at which investors start to become nervous, and the company’s own long-term target of 2 times. And of course, to continue the progress, the earnings side of the equation needs to keep growing too.The weak performance in the third quarter underlines the need for AB InBev to do deals to lift its sales growth and employ its cost-cutting prowess.The company has the benefit that it can use shares in the Asia Pacific business as an acquisition currency. But Duncan Fox, an analyst at Bloomberg Intelligence, notes that it probably has only about $10- $11 billion to play with before it relinquishes control of the unit, something it will not do. While that’s useful, with valuations rich in the region, it probably won’t go that far.The fact that Asia was weak, hindered by rules in China curbing the sale of alcoholic drinks after 2 a.m. and the impact of price increases in South Korea, is also unhelpful. Shares in the newly listed Budweiser Brewing Company APAC Ltd. fell as much as 7.7% on Friday after the brewer reported a 23.5% drop in third quarter net income.With debt still high at AB InBev despite the deleveraging progress, all this probably implies more moderate purchases.The group has the ability to surprise – take the sale of the Australian business days after abandoning its first attempt to list the Asian business in July – so a blockbuster can’t be entirely ruled out.But for now, it looks like it will have to settle for small beer, rather than another megabrew.To contact the author of this story: Andrea Felsted at email@example.comTo contact the editor responsible for this story: Melissa Pozsgay at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Shares in Anheuser-Busch InBev tumbled 10% on Friday after the world's largest brewer lowered profit growth forecasts for this year after drinkers in Brazil and South Korea turned away from its beers in a weak third quarter. Brazil's economic performance has been erratic, reporting a contraction in the first quarter.
Europe's retail index gained 1.2%, leading gains among major subsectors. The food and beverage sector led losses on Friday, however, after brewer AB InBev provided a cautious outlook and reported weaker-than-expected quarterly earnings growth, sparked by reduced demand for its beer in Brazil and South Korea. "You have a mechanical effect from that 10% decline in AB InBev, but you can't really generalize.
Anheuser-Busch InBev saw more than $13 billion (£10 billion) wiped off its market value on Friday, after a profit warning and weaker-than-expected third-quarter earnings growth sparked by reduced demand for its beer in Brazil and South Korea. The downbeat updates highlight challenges facing global brewers in large developing markets in Asia, Latin America and Africa, whose promise of higher growth is supposed to make up for reduced beer drinking in Europe and the United States.
(Bloomberg Opinion) -- Hong Kong may have been seeing money flow out as the city’s turmoil undermines its reputation as a stable financial center, but one important source of capital keeps on coming: cash for initial public offerings.The city has hosted two IPOs of more than $1 billion since early June and ESR Cayman Ltd. is testing investor appetite for a revived share sale of as much as $1.45 billion. The Hong Kong-based warehouse operator, which is backed by Warburg Pincus and Goldman Sachs Group Inc., delayed its IPO in June citing unfavorable market conditions. It has now increased its fundraising target from $1.24 billion.ESR is the second company to resuscitate a flotation since June, when large-scale protests started to affect Hong Kong. Budweiser Brewing Company APAC Ltd. completed a $5 billion offering last month, having shelved its sale in July amid lackluster demand. The Asian unit of Anheuser-Busch InBev NV almost halved the size of the IPO from a planned $9.8 billion. The stock has risen 15% since it started trading at the end of September.While Hong Kong has slipped from being the world’s largest IPO venue last year, it’s still running in third place in 2019 behind the Nasdaq and New York exchanges, with companies having raised $18.6 billion in the city, according to data compiled by Bloomberg. That testifies to Hong Kong’s enduring strength as a capital-raising hub, an advantage that won’t easily be prized away by any regional rival.The bottom line for companies such as ESR is that they have few other choices. Hong Kong has Asia’s deepest stock market bar Tokyo, where investors are mostly domestically focused and few foreign companies opt to list. Singapore, meanwhile, has been bedeviled by a lack of liquidity. The city’s market capitalization has shrunk to $478 billion — smaller than Thailand’s and less than a 10th of Hong Kong’s $5.2 trillion, according to Bloomberg-compiled data.(2) Hong Kong-traded Fortune Real Estate Investment Trust withdrew its dual listing from Singapore’s main board in June, citing costs of compliance and low trading volumes, one of a number of companies to have abandoned the exchange. Singapore is the world's 12th largest venue globally for IPOs this year, behind even Borsa Italiana and SIX Swiss Exchange. Even well-known Singapore names have been looking to sell shares elsewhere: PropertyGuru Ltd., an online real estate classifieds business backed by KKR & Co. and TPG Capital, had been looking to list in Australia, before withdrawing an expected $260 million IPO on Wednesday. A mild recovery in Hong Kong share prices has given companies confidence to venture back, with the benchmark Hang Seng Index climbing about 5% from its August low. And positive post-IPO performances are helping to bolster investor interest. Besides Budweiser, Chinese sportswear retailer Topsports International Holdings Ltd. has climbed 15% since raising $1 billion this month.A peculiarity of the Hong Kong market has also aided the return of Budweiser and ESR: the cornerstone investor. Budweiser sold a $1 billion stake to Singapore’s sovereign wealth fund, while Canadian pension fund OMERS has committed $585 million to ESR’s offering. First time around, neither company had cornerstones — big investors that commit to hold the shares for a minimum period, signaling confidence to other buyers. ESR, which has logistics assets in countries from China to India, is seeking to sell stock at a premium to its bigger, Australian-listed competitor Goodman Group. At the bottom of its targeted price range, ESR is priced at 26.1 times its estimated 2020 enterprise value to Ebitda, according to Aequitas Research analyst Sumeet Singh, who writes on Smartkarma. Goodman is trading on a ratio of 21.8 times, according to Bloomberg-compiled data.That looks ambitious, though it may reflect the return of more buoyant conditions to the Hong Kong market. A successful sale is likely to encourage more listing candidates to tiptoe back.\--With assistance from Zhen Hao Toh (Adds footnote on the calculation of market cap figures in the fifth paragraph.)(1) The market capitalization figures for Singapore and Hong Kong don't include ETFs and ADRS, and include only actively traded, primary securities on the two exchanges to avoid double counting. Including secondary listings, Hong Kong's market cap is $6.1 trillion, versus $672 billion for Singapore.To contact the author of this story: Nisha Gopalan at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.