Viewsroom: One hundred days of Brexit 30 Sep 2016 Oct. 2 marks 100 days since Britain’s vote to leave the EU. How has the economy fared, and will the City of London weather Brexit? Breakingviews writers discuss trade deals, financial services and the scale of the challenge facing Prime Minister Theresa May.
Trump cold shoulder for TV ads may set the trend 30 Sep 2016 TV loves the GOP presidential nominee, but he has spent only $78 mln so far on political ads. Broadcasters usually count on an election-year windfall, but spending is forecast to fall and digital upstarts like Snapchat are in the mix too. Trump's playbook could become a classic.
Venezuelan debt swap may ease coming pain 30 Sep 2016 State oil company PDVSA sweetened earlier terms and is now offering more bonds maturing in 2020 in exchange for $5.3 bln worth coming due next year. With crude prices rising, there's a glimmer of hope of postponing default. And investors would get a bigger claim once it comes.
Review: Explosions hide reality in BP spill movie 30 Sep 2016 Peter Berg's blockbuster turns the complex Deepwater Horizon disaster into a simple fight between working-class U.S. heroes and a money-grubbing British company. The rig crew's actions surely saved lives. But the film obscures the challenges of oil extraction and lax regulation.
Deutsche debt market canaries not yet in coal mine 30 Sep 2016 Fears over the German lender have hit its stock and made some clients pull funds. Yet Deutsche Bank’s deeply discounted "CoCo" bonds are still only pricing in the risk that the bank cuts off coupons, not wipes them out. Worse scenarios, like resolution, aren’t yet on the cards.
Ralph Whitworth: the gentleman activist investor 30 Sep 2016 The Relational Investors co-founder, who died at 60, was an anomaly in the sharp-elbowed world of forcing change at companies. He preferred working behind the scenes instead of getting into public fights. That helped reluctant boards grow more comfortable talking to agitators.
Deutsche Bank has credible shock absorbers 30 Sep 2016 The German lender's shares are falling on fears hedge funds are withdrawing cash. No bank would emerge unscathed if customers really turned tail. But Deutsche's relatively strong funding, and a battery of central bank support facilities, suggest liquidity isn't its main headache.
Dutch food IPO delivers a lukewarm debut 30 Sep 2016 Shares in Takeaway.com were up 6 percent on its first trading day, less impressive than UK rival Just Eat's 10 percent 2014 debut pop. True, European markets are having a bad day. But pricing was also punchy for a tech group that has yet to become top dog in some of its markets.
Trouble at Deutsche Bank creates tentative winners 30 Sep 2016 It's in the interest of banks and regulators everywhere that the German lender stays afloat. Yet others may benefit if Deutsche Bank is weakened by its woes. U.S. rivals can grab even more market share. And the Italian government gets an opportunity to tackle its ailing lenders.
Guest view: A new blueprint for corporate tax 29 Sep 2016 Europe's complaint against Ireland and Apple reflects a problem bigger than any one company or country. The global approach to tax is past its sell-by date. A system based on revenue location, and that treats multinationals as single entities, could share the pie more fairly.
Buying Chinese bonds still bad idea, just less bad 30 Sep 2016 Foreign investors are accelerating plans to increase their holdings of Chinese bonds, a poll shows. The prospect of global index inclusion is likely to push up prices, and yields are attractive. But the fundamentals are still scrambled. This is no place to park the pension.
Li Ka-shing’s banking foray is an odd throwback 30 Sep 2016 The Hong Kong tycoon, his son, and foundations have emerged as a near-3 pct shareholder in the newly listed Postal Savings Bank of China. The indirect stake is worth $1.4 bln. Li has dabbled in banks before. But the "performance-linked notes" suggest he is treading cautiously.
China ties can help Hong Kong catch up in fintech 30 Sep 2016 The city is playing catch-up with Singapore in financial technology. But as a gateway to mainland China, Hong Kong has two big advantages: easy access to a huge market, and proximity to tech giants Alibaba and Tencent. Those benefits should help it close the gap.
Cash burning in pocket propels Qualcomm dealmaking 29 Sep 2016 The $100 bln semiconductor firm has grown plump on mobile phones - and so has its balance sheet. But handset sales are slowing and Qualcomm doesn't get much credit from investors for cash trapped offshore. Buying $35 bln Dutch chip roll-up NXP potentially helps both problems.
IBM’s Watson morphing into bank super-regulator 29 Sep 2016 Big Blue is buying Promontory, a politically connected consulting shop for financial firms that face increasing regulation. Feeding Promontory clients' data into IBM's artificial-intelligence systems could flag problems faster. It might also make watchdogs' jobs even harder.
John Stumpf takes all the rope Congress gives him 29 Sep 2016 For his second appearance on Capitol Hill, Wells Fargo's CEO could point to pay he forfeited for the fake accounts scandal. Stumpf nevertheless was badly bruised again, in part because of his own lame excuses and contradictions. It bodes poorly for the many probes the bank faces.
Exchange: Judy Shelton 29 Sep 2016 Donald Trump has made a lot of promises to spur U.S. economic growth if he becomes president. Judy Shelton, co-director of the Sound Money Project, is one of the economists working with the GOP nominee to turn this pledge into action. She sat down with us in Washington recently to discuss her views on global finance and monetary issues.
Pepsi fizz suggests soda siege only just bubbling 29 Sep 2016 The $156 bln beverage and snacks titan generated better-than-expected sales and profit thanks to higher ad spending and lower-calorie drinks. Creeping health concerns and soda taxes threaten to shake up industry finances. In the meantime, Pepsi is trying to stay ahead of trouble.
Commerz sees low bar for bank earnings, lowers it 29 Sep 2016 The German lender wants board support for cuts to 9,600 jobs and its investment bank. But Commerzbank's 2020 return-on-equity goal of 6 pct would still destroy shareholder value, is lamer than fellow laggard Standard Chartered's and needs heroic revenue growth.
Bold issuers test limits of yield-hungry market 29 Sep 2016 Bond investors, who only recently snapped up negative-yielding Sanofi and Henkel debt, shunned an aggressively-priced Lufthansa offering. IPOs too are showing signs that buyer power is returning and that desperation for yield hasn’t dulled asset managers' ability to scent risk.
Deutsche Bank’s CEO ought to channel his old self 29 Sep 2016 The prospect of large fines means the German lender may need capital, but the market is unlikely to provide it without decisive action. Breakingviews imagines what a younger version of boss John Cryan, then an investment banker at UBS, might advise his present-day equivalent.
Germany gets economic rebalancing only half right 29 Sep 2016 The country no longer depends on exports for growth. Strong domestic demand is the key driver these days, a government-commissioned report says. Yet the current account surplus is still rising. Blame not only Angela Merkel’s fiscal restraint but also weak corporate investment.
Capita faces trifecta of debt, delay and doubt 29 Sep 2016 The UK outsourcing company is finding out investors don’t like surprises in a usually predictable industry. Delays in a big Transport for London contract and post-Brexit jitters could see profit before tax be 13 percent below its target, and make its balance sheet look strained.
Bedroom musicians may amplify Spotify profit issue 29 Sep 2016 The Swedish streaming group is in talks to buy SoundCloud, a site where amateur musicians upload songs for free. It would bring 175 mln monthly listeners and additional industry clout. But buying a loss-making group might not help Spotify address its key goal: turning a profit.
Powerful owners hobble Asia’s governance reform 29 Sep 2016 Asian corporate governance is improving despite frequent scandals, according to a review, which goes on to call on institutional investors to speak up more. Fair enough, but majority owners can still bully outsiders so long as the latter lack say over independent directors.
China’s HK office obsession locks in low returns 29 Sep 2016 Mainland companies such as Evergrande are snapping up prestigious Hong Kong office buildings. With rental yields below 3 pct, these seem like poor investments. That suggests buyers might also be looking for ways to guard against a further selloff in the yuan.
Philippines tests patience with political risk 29 Sep 2016 President Rodrigo Duterte is the top risk to an economy in rude health. Despite a sensible financial agenda, his inflammatory language and bloody war on drugs has foreigners fleeing stocks. The worry is that Duterte's wild streak will prompt direct investors to pull out too.
Output deal buys OPEC time but not deliverance 28 Sep 2016 The oil cartel surprisingly agreed to cap production but has deferred agreement on which members will reduce the flow of crude. Limiting daily output to 32.5 mln barrels should support global prices for now. A lasting plan to balance supply and demand, though, may remain elusive.
Listed Jose Cuervo may be just as hard to swallow 28 Sep 2016 The tequila maker is set to sell a slug of its shares in an IPO. The controlling Beckmanns will still call the shots, though, and key family members would have to agree to sell. A float will make any weakness more obvious, but Diageo and other possible suitors can be held at bay.
CBS-Viacom tie-up may please only the Redstones 28 Sep 2016 The controlling family wants to reunite the two media firms. Les Moonves at the stronger CBS would do non-Redstone shareholders a disservice if he paid a full premium, but Viacom's owners might want one. Any middle ground is narrow at best – and a governance minefield.