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Wednesday, 04 May 2016

BREAKINGVIEWS

Billionaire and Cheung Kong chairman Li Ka-shing is seen during a news conference in Hong Kong May 27, 2010.

UK deal veto would be big setback for Li Ka-shing

04 May 2016

A $15 bln takeover of Telefonica’s O2 unit was key to making the Hong Kong tycoon’s costly bet on European telecoms pay off. If CK Hutchison cannot overturn a likely EU veto, his UK telco will either have to carry on as a disruptive fourth player, or find a fallback deal.

The name of City of Dreams, owned by Melco Crown Entertainment, is displayed at City of Dreams development in Macau, China November 18, 2015. REUTERS/Bobby Yip

Bets on Macau run ahead of reality

04 May 2016

Gaming revenues are falling less steeply in China’s gambling enclave, and could stabilise this year after crashing a third in 2015. But the move away from VIPs remains a work in progress. Investors in Sands China, Wynn Macau and others are getting ahead of themselves.

Mark Zuckerberg, founder of Facebook, in Barcelona, Spain, February 21, 2016.

Retrograde governance will cost Facebook little

03 May 2016

The social network’s new non-voting shares have been challenged in court. A similar spat at Google ended with the search giant paying shareholders just $522 mln – 0.15 pct of its market cap. An equivalent result at Facebook would entrench boss Mark Zuckerberg’s control cheaply.

Human genetic material is stored at a laboratory in Munich May 23, 2011.

Medical firms' $18 bln merger lacks clear logic

03 May 2016

Healthcare data miner IMS is uniting with Quintiles, a manager of drug trials. Each will own about half the combined company, and other than some cost savings, the reasons for combining are a bit nebulous. The presence of buyout firm TPG on both sides may offer some clues.

Russian President Vladimir Putin attends a joint news conference with Uzbek President Islam Karimov (not pictured) following their meeting at the Kremlin in Moscow, Russia, April 26, 2016.

Investors treat Russia like a wounded bear

03 May 2016

Russia’s escalating anti-Western rhetoric is damaging its chances of winning back foreign investment. Shifting the blame may keep Russians distracted from economic realities for a while longer, but it can’t replace hard cash.

CFO Kirt Gardner (R) talks to CEO Sergio Ermotti of Swiss bank UBS before an annual news conference in Zurich, Switzerland.

UBS's golden ratio shows cuts are vital

03 May 2016

The Swiss bank is rejigging its wealth unit after trading income as a percentage of invested funds dipped to historic lows. Group return on equity was just 5.1 pct in the first quarter. UBS depends on rich folks being active. When they aren’t, the only option is to trim expenses.

Italian Prime Minister Matteo Renzi (L) receives a Ferrari's Formula One replica from FCA Chief Executive and Ferrari Chairman Sergio Marchionne.

Marchionne's job upgrade bodes ill for Fiat

03 May 2016

The storied boss of Fiat Chrysler has taken over as chief executive of spun-out Ferrari, too. Leading the iconic luxury carmaker is surely the more alluring of the two jobs. Yet challenged Fiat Chrysler arguably needs Sergio Marchionne’s full attention more than ever.

Halliburton corporate offices in Houston, Texas April 6, 2012.

Halliburton owners may have to speak up again

03 May 2016

CEO David Lesar passed on using Tuesday’s earnings call to apologize after overconfidence in a failed deal cost the company $3.5 bln. Nearly 30 pct of shareholders dissed Halliburton’s executive pay last year. Maybe they’ll send a sterner message in this month’s annual vote.

Steven Cohen in California, U.S., May 2, 2016.

Steve Cohen returns as beau of Wall Street ball

03 May 2016

The billionaire investor starred at Michael Milken’s annual bash, warning global grandees that overcrowding in the hedge-fund world is lowering returns. Now managing $11 bln of mostly family money, his joviality seemed justified: U.S. watchdogs left him bruised but unbowed.

British Prime Minister David Cameron (L) with Brendan Barber, former general secretary of the Trades Union Congress (R) at a Caterpillar engine factory in Peterborough, Britain, 28 April 2016. Britain will vote whether to remain or leave the EU 23 June.

UK slowdown has a silver lining for Cameron

03 May 2016

An unexpected contraction in manufacturing is the latest sign that growth is losing momentum. Usually such a slowdown would be unmitigated bad news for the government. Right now, it’s all useful PR fodder for Prime Minister David Cameron in his battle to keep Britain in the EU.

A pedestrian walks past an advertising billboard promoting home loan interest rates in Sydney, Australia, April 29, 2016.

Australian central bank comes to miners' aid

03 May 2016

Cutting interest rates to an all-time low of 1.75 percent will weaken the currency and help stave off deflation. Reversing the Aussie dollar’s recent rise will help make miners Down Under more competitive. That offsets the risk of further heating up the country’s housing market.

HSBC

HSBC and ANZ take roundabout path to stability

03 May 2016

Choppy markets and higher bad debts knocked HSBC’s pre-tax profit by 14 pct in the first quarter. Erstwhile rival ANZ slashed its dividend after first-half earnings dropped almost a quarter. The process of making banks safer and less exciting is proving far from straightforward.

A detail of the facade of the headquarters of French bank BNP Paribas in Paris, France.

BNP keeps capital catch-up plan on track - just

03 May 2016

The French bank’s revenue shrank less than costs, reversing the dynamic from the previous quarter and helping returns to improve. BNP needs profits to bring solvency in line with peers. But it would help if earnings were driven by a higher top line, not just lower bad debts. 

Columns

Rob Cox

Cox: What Mark Zuckerberg could learn in Quebec

28 April 2016

The founders of mini-mart leviathan Couche-Tard devised a clever way to balance supporters and detractors of dual-class stock by eliminating voting rights over time. The idea would suit Facebook and many others, if only bad tendencies fueled by ego could somehow be overcome.

Edward Chancellor

Chancellor: Oil prices don't need a Doha to rise

22 April 2016

An agreement among feuding OPEC members to cut production may still be elusive. But the Saudis and other oil-producing nations are in no position to ramp up. As U.S. oil output is set to fall sharply this year, the price of energy is likely to keep heading upwards.

Features

Antony Currie

Climate change is investment deal of the century

22 April 2016

Reducing carbon dioxide emissions and hitting other sustainability goals will cost trillions of dollars. But it should spur growth and jobs and create the higher-yielding, long-term assets investors crave. Policymakers, though, need to follow through on their pledges, too.

Robyn Mak

Review: A short tour of Jack Ma's virtual mansion

22 April 2016

An insider’s account provides fresh insights into the origins of China’s most successful entrepreneur. Yet the tale of Ma’s rise reveals little about the inner workings of his e-commerce empire. Outsiders are no closer to disentangling Alibaba’s future from its founder.

Rachel Morarjee - Light

Breakdown: Why are Chinese bond defaults surging?

21 April 2016

More state companies are failing to pay bondholders. This is partly necessity amid an economic slowdown, and partly a useful dose of market discipline. But the withdrawal of government support could spook investors, creating a credit drought.